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Law partners put ethics first

March 2010

New ethical procedures at a global law firm have led to an increase in the number of partners discussing reputational issues before taking on new business.

UK-based Linklaters says the rise is largely attributable to an in-house regime that encourages its 500 partners to discuss with their peers the ethics of taking on certain clients or projects.

When considering whether to take on new business, all partners are now required to address seven questions related to strategy, ethics and reputation – and to review their answers with other partners working in the same country or region, in the same business sector and same practice type.

The partners are supported by a specialist risk team of dedicated risk lawyers and advisors. The risk team may raise issues with partners, or partners can approach the team directly.

Oonagh Harpur, global head of corporate responsibility at Linklaters, told EP the team is taking 15-20 enquiries a week on reputational risk. In some cases 'this has resulted in business being turned away where real concerns were identified'.

Linklaters, which advises major businesses and institutions on areas such as mergers, acquisitions, and banking, cannot divulge information on who has been turned away or why, and does not want to reveal the details of the 'seven questions', but says the 18-month old initiative has been a success and is popular with partners.

'At first many of the partners said "we've always done this", which is true, but this is a more structured way of doing things that equips people to be better able to make such decisions locally,' said Harpur. 'It's about being clear that our strategy and values matter, and trusting our partners to make the right judgements. The idea is to help partners take consistent decisions all over the world.'

Harpur said the system had been devised because of the importance in a global law firm of individual partners making decisions that are consistent with the firm's strategy and values.

'Because we're a partnership we don't operate within the normal corporate structure, where you can refer everything up to a board or an ethics committee. We interviewed 130 partners on all aspects of client relationships, and we found that taking on new clients and new matters was the one area where there was the most inconsistency. We looked at having an ethics committee and setting up blanket exclusions, but that was clearly not going to work. We needed a more flexible approach which allowed partners to make consistent decisions while reflecting the complexity of their particular sector, jurisdiction and practice area.'

The seven questions used by partners require them to 'consider and consult' on relevant strategic, regulatory, ethical and reputational issues before taking on new work. These can be debated with, and referred to, senior management if appropriate - or to the risk team. A particularly thorny issue can be sent to the firm's senior partner, David Cheyne, for final discussion.

Over the past year Linklaters has run a number of awareness-raising sessions with partners. It now monitors and reports to its executive committee on the frequency with which partners have consulted the risk team on reputational or ethical issues. And in areas of the world considered to be higher risk, partners are sometimes required to document their answers to the seven questions.



Linklaters | Global | Business ethics

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