| Banking focus: part 1 |
Breaking freeWith the liquidity crisis in full swing, large-scale litigation against major financial institutions is inevitable. LB considers the firms that are shackled to the banks and those that will benefit most from the credit crunch. By Mark McAteer Earlier this year, Clifford Chance, one of the strongest litigation firms in the country, had to turn down an instruction from key client British Energy and refer it to Barlow Lyde & Gilbert. Why? The respondent in the case was Credit Suisse. And Credit Suisse is one of Clifford Chance’s biggest banking clients. In the land of the major City law firm, the bank is king. It’s the reason business development teams and management committees spend most of their lives and a lot of firms’ capital devising new tactics to win extra work from major bulge-bracket and retail banks. The ultimate prize is a deeper relationship with these global power brokers. The last taboo for the firms relying on the major banks for sustenance (which is most of them) is to act against those same banks in litigation. These banks dish out the finance deals and often decide which firms are instructed in big-ticket M&A. And they take a very dim view of any firm prepared to act against them. They have clauses in their panel contracts expressly stating that any firm on their panel that threatens litigation against them will not receive any instructions; and every firm in the top 20 or so law firms is on the panel of one bank or another. As a result, corporate and banking departments at major City firms have traditionally determined who their litigation colleagues sue and when. To read the rest of this article subscribe to Legal Business. 
|
