Firm adopts ADR for practice disputes

POTENTIAL disputes among the top ranks at Baker & McKenzie will be resolved through alternative dispute resolution rather than in the courts after the firm voted to alter its partnership agreement.

The change comes after partners showed preliminary support for the proposal at the firm's annual partnership meeting in Chicago last month.

Partners across the globe agreed in principle to abandon litigation and submit to binding arbitration if a division among the practice occurred. ADR would be conducted according to United Nations rules.

A committee is now rewording the partnership contract to accommodate the change and the firm says a new contract is likely to be drafted by the end of the year.

Under Baker & McKenzie's partnership rules, 85 per cent of partners must support the move. “I'm quite confident it will be passed,” said the firm's Palo Alto-based executive committee chair John Klotsche.

Dibb Lupton Broomhead's head of human resources Paul Nicholls said the ADR clause was sensible, “although there will always be occasions when partnerships need the courts”.

“It would be unfortunate if an ADR clause slowed the process in any way,” he said.

One City firm said it was surprised Baker & McKenzie had identified dispute resolution as an issue, adding that law firm disputes ending in litigation might be more common in the US than the UK.

Eversheds national managing partner Peter Cole agreed, saying his partnership agreement did not include an arbitration clause.

“We don't expect disputes with partners to lead to a situation where we would have to choose between arbitration or litigation,” he said.

But Klotsche said Baker & McKenzie had taken the decision in line with many businesses outside of the legal profession.