When selecting counsel to defend them against a securities class action, companies usually face the question of whether they want to hire attorneys from their regular outside corporate firm. Sometimes, companies will retain their regular outside firm as a matter of course, without even going through an audition process to interview other potential defense firms.
But while such an arrangement is frequent, it can be inappropriate. Ethical and practical conflicts lurk beneath the surface that can make it unwise for a company to hire its regular outside firm for securities class action defense – and these conflicts need to be examined more closely by companies, their insurance carriers, and the counsel seeking to represent them.
‘Enforcement 40’ for 2020
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