Swiss verein law firms, made up of multiple distinct legal entities, like to portray themselves as one unified firm-but when they're against the wall, do they shape-shift to their advantage?
Feb 25, 2024 View in Browser

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Swiss verein law firms, made up of multiple distinct legal entities, like to portray themselves as one unified firm. That is until they come up against the courts, when they conveniently rely on their diffuse structure to their benefit.

 

I'm Krishnan Nair, Managing Editor of Law.com International, bringing you this week's edition of The Global Lawyer.

 
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Picture this. A man visits Air Canada’s website after his grandmother died to book a flight from Vancouver to Toronto. He uses the airline’s bereavement fares. He asks the site’s chatbot about the reduced fares. It tells him: he can book travel immediately; that he can retroactively apply to get a partial refund. What a compassionate chatbot that is!

 

But here’s where things get strange. Shortly after, as Gail J. Cohen reports, the airline denies the man’s claim, saying he did not follow the proper procedures to request the discounted fare.

 

The case goes to a Canadian tribunal where, sensationally, the airline in effect argues that the chatbot is a separate legal entity that is responsible for its own actions, as one of the tribunal members put it. “This is a remarkable submission,” he added.

 

A business blaming an AI to dodge scrutiny? It’s just the information age’s iteration of the time-honoured corporate tradition of absolving oneself of responsibility.

 

In high times, you enjoy in the fruits of a large corporate, in low, you shroud yourself in the legal protections afforded by the Ltd or Plc. Or indeed of the Swiss Verein, which has become a mainstay of the legal industry.

 

The verein has enabled law firms to become freakishly large, geographically diffuse organisations with the ability to establish instant brand recognition in erstwhile unchartered regions, deploy large cross-border teams on international mandates and induce such prodigious growth that once-modest local enterprises have become the modern-day behemoths of Dentons, Norton Rose Fulbright, DLA Piper and Baker McKenzie.

 

So the benefits to the verein are clear. But once again the question of precisely what a verein is, and whether it is yet another way for corporate players to swerve responsibility, came back into headlines last week...

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