While White & Case licks its wounds and goes away to consider an appeal, Deacons claims to have been fully vindicated in its rigorous pursuit of one of the most extraordinary examples of inter-law firm litigation in recent years. Not least because such a cumbersome outfit as a law firm partnership – with its creaking decision-making structure and the limited scope for any trial to bring commercial success – allowed the case to reach the courtroom in the first place.
The reputational damage to all parties is impossible to quantify, but given the time, expense and energy expended and with other local rivals keen to take advantage, can any provocation be deemed sufficient to justify the cost?
There was plenty at stake. Mark Fairburn and his team were a highly-rated insolvency and restructuring group with a projected turnover of HK$31m (£2.4m) in the first full year, expected to rise to HK$39m (£3m) in the third year, according to the Business Plan for Business Recovery and Insolvency, submitted by Fairburn to White & Case and reproduced in part in the judgment.
The predicted client following was also considerable and included: Standard Chartered Bank (SCB), BNP Paribas Peregrine Capital, KPMG, PricewaterhouseCoopers and Ernst & Young. SCB was such a fan of Fairburn that the bank even initiated a meeting for him with an alternative and rival to White & Case in the form of Shearman & Sterling. Fairburn was even found to have charged a lunch to Deacons that was used to gain assurances that instructions from key client SCB would continue. To add insult to injury, the prevailing market view at the time was that Fairburn and his team were hard done by and should have been allowed to leave freely.
But Deacons could never have hoped to keep those clients whose minds were already set. Regardless of the details of any partnership agreement, what property is there in a client? Normally, even bitter negotiation would likely produce an agreement that would allow both parties some satisfaction, ie sacrificing the loss of one client loyal to the individual in return for an agreement to retain others.
The other major piece of partnership litigation pending (if it ever reaches trial) promises to be just as good: the world’s largest law firm (Clifford Chance) against disgruntled staff and partners from a collapsed firm (Brobecks) with little or nothing to lose.
Keep your eyes peeled in The Lawyer every Monday for the latest on the biggest release since Kill Bill.