Businesses confronted with a dispute emerging from a transaction face a dilemma – instruct a new law firm regarding that dispute or be represented by the same law firm that advised on the transaction. Here are some key factors to consider:

Expertise: The law firm that handled the transaction might lack the optimal disputes team or familiarity with the specific resolution mechanisms outlined in the contract.

Conflicts: The advising firm could face conflicts of interest, affecting their ability to provide unbiased advice due to potential liability concerns.

Bias: Familiarity with the transaction may cloud the law firm’s judgment, potentially overlooking compelling arguments supporting the client’s case.

On the other hand, engaging a new lawyer for the dispute brings another set of challenges:

Learning Curve: Fresh lawyer will need to learn the case from scratch, possibly leading to increased costs and time.

In light of the above, instructing a new law firm might be a better approach and is indeed a standard practice of many sophisticated organizations acting on mature markets. The limitations resulting from bringing new lawyers to the case may be resolved by ensuring smooth communication between the new counsel and the transactional team.

by Wojciech Sadowski