No cause for conflict

Reckless on conflicts? Freshfields? Certainly not. But goodness, the firm has some chutzpah. You would have thought that in the same year that former corporate head Barry O’Brien was hauled over the coals by a disciplinary tribunal for Freshfields’ conflict on the M&S bid, the firm would want to keep up appearances.

But such sensitivities only go so far, it would appear. The revelation that it is still in place as Northern Rock’s primary adviser but advised the Bank of England on its emergency facility to the Newcastle-headquartered bank has caused incredulity in the upper reaches of the City.

I am, of course, obliged to note that there is no suggestion that Freshfields has broken any conflict rules on this. Indeed, some City lawyers simply shrug off Freshfields’ role. A deal is a deal, goes their argument, and if taking on the job isn’t infringing the letter of the law, then it’s fair game.

But the majority of senior transactional partners we spoke to expressed astonishment that Freshfields would want to expose itself on this score, no matter how juicy the work for Northern Rock.

The deal junkies have held sway again: in the case of Northern Rock, the fees appear to have been all too tempting. But let’s be charitable: if nothing else, it’s entrepreneurial.

It’s equally interesting that Freshfields has distanced itself from its oldest client the Bank of England – a move that leaves space for Clifford Chance to promote its growing reputation as the go-to regulatory practice. And Clifford Chance must be gleeful on hearing reports that senior figures at the bank were furious with Freshfields. You can’t imagine that senior partner Guy Morton, one of the relationship partners, is ecstatic about that. However, work for the Bank of England does not yield the same fees as premium M&A and this all underlines a new attitude in the freshly restructured Freshfields. It sees its future as a bull market deals firm.

Freshfields has finessed its way out of this one, but it had better beware being linked to the dangerous issue of conflicts. A reputation for sailing close to the wind is very tricky to shake off. There’s a fine line between swashbuckling and recklessness.