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CHICAGO � Some attorneys who represent corporate policyholders in lawsuits against insurance companies say that firms are edging out their practice groups to cater to more lucrative insurer business. Attorneys who have left Mayer Brown and Schiff Hardin during the past two years say they believed an exit was necessary in order to build their policyholder practices in the face of rising firm preferences for insurance company work. There have always been some firms that tended to represent insurers and others that represented the companies that hold significant insurance policies, such as manufacturers. Firms chose one or the other to avoid the conflicts of interest that can arise when policyholders sometimes sue the insurers over settlement terms, legal fees or other issues related to coverage. Now, firms’ movement toward one camp or the other has become more pronounced, the lawyers said. Firms increasingly have rules that limit policyholder work and don’t get waivers from insurers to do that work, they said. “At the end of the day, it’s very, very hard to have both kinds of practices in the same firm, and Mayer Brown has definitely taken the spin toward the insurer side,” said John Vishneski, who left earlier this year to join Reed Smith Sachnoff & Weaver, Reed Smith’s new office in Chicago. Mayer Brown worked hard to accommodate both groups and even commissioned a consultant study of the issue, but in the end the Chicago-based firm’s desire to advance its finance practices in London and New York led it to focus on the insurers, he said. Mayer Brown spokesman Doug Kramer declined to comment. “For me, it’s just not a long-term thing that I can live with, the pendulum has just swung too far,” Vishneski said. Mergers a factor The attorneys chalk up the change to insurance industry and legal industry mergers that have created new conflicts of interest. Firms are also showing an increased preference for lucrative noncoverage insurer work, such as transactional and securities work, and are willing to give up some policyholder work to maintain ties with the insurers. Some also note that lawsuits brought by policyholders against insurance companies have become less frequent in recent years. “The big, major suits that made it worthwhile to be on that side of things have not been as common,” said Edward Zulkey, an insurance-practice partner at Baker & McKenzie who is now the firm’s general counsel. Some attorneys say the shift is fueled by firms seeking to cultivate a range of business with insurers at a time when associate pay is rising, while others say it is driven by insurance companies that have more leverage to dictate a firm’s client list. Many firms that represent insurance companies said that basic conflict-of-interest standards often keep them from representing both policyholders and insurers. Jill Berkeley left Schiff Hardin’s Chicago office last year to join Washington-based Howrey’s office in Chicago when her former firm discouraged her from taking new clients, bringing “bad faith” claims against insurers or getting waivers from insurers for her policyholder work. She turned away dozens of cases before leaving the firm amicably, she said. “It was very hard for me to do,” Berkeley said in an interview. “But I wasn’t going to be able to build my business by staying at Schiff Hardin.” Schiff Hardin agrees it has focused on its large institutional insurance company practice. “We tend to limit the number of coverage cases we have in light of those relationships,” said firm spokesman David Milberg.

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