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Baker & Mckenzie partners worldwide face paying $3.5m bill for damages for sexual harassment of a secretary by one of its Californian partners.
Legal secretary Rena Weeks brought the suit in 1992 claiming she had been groped and verbally harassed by her boss, Martin Greenstein - a former trademark partner at the firm's Palo Alto office.
This month a California appellate court has upheld a $3.5m punitive damages award. The court held the firm liable for Greenstein's behaviour because it did not have the internal mechanisms in place to deal with the problem.
If the ruling stands, partners will have to pay out from their profits as the firm was not insured for such a claim.
Bakers' general counsel Edward Zulkey said the firm now held training programmes to raise the level of awareness of sexual harassment and discrimination issues. He said the legal battle had not yet been lost.
He said the firm could either petition for a rehearing before the San Francisco appellate court, pointing out errors in opinion, or it could petition for discretionary review of the case at the Californian Supreme Court.
A spokesperson for Bakers said the firm felt "the award was out of line with ruling".
Zulkey said the motivation for the firm to provide training existed beyond liability and aimed at ensuring a good working environment for all staff.
Baker & McKenzie has recruited three high profile lawyers - Professor Doctor Carl-Otto Lenz, a former advocate general of the European Court of Justice, Aristotelis Kaplandis, a partner of EU law boutique Forrester Norall and Sutton/White & Case and James Cameron, an international environmental and trade law barrister at 3 Verulam Buildings - to set up a European Law Centre in Brussels.