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L EGAL E T H IC S BY PHILIP SLAYTON Counsels of perfection The disciplinary hearings of two Bay Street lawyers are not only about them, but also about the credibility of law societies and self-regulation. DeMerchant and Darren Sukonick. The two lawyers are accused of having acted in a conflict of interest without disclos- ing the conflict and without getting the informed consent of each affected cli- ent. At the time of writing, the panel's decision had not been handed down. A lot of people are nervously waiting for it. This affair is not the usual garden- A variety disciplinary matter. DeMerchant and Sukonick both worked at Torys LLP, the powerful and prestigious Bay Street law firm (Sukonick is still there; DeMerchant left to spend more time with her family). The conduct being investigated was part of the infamous Conrad Black saga, which destroyed Law Society of Upper Canada dis- ciplinary panel recently held hear- ings into the conduct of Dorothy careers, companies, and lives. Big issues are at stake, not just concerning the behaviour of two lawyers, but also about conflicts of interest, the conduct and policies of law firms, and the willingness of the law society to police its members effectively. DeMerchant was a Torys partner. Sukonick was an associate who worked for DeMerchant and who has since become a partner. In 2000-02, they acted for Hollinger International and various of its affiliates and subsidiaries in the sale of newspapers, primarily to Canwest Global Communications Corp. (an ill- starred transaction if ever there was one). As part of those transactions, other clients of DeMerchant and Sukonick — notably Black — received substan- tial payments for non-competition cov- enants. In roughly the same period, 18 JULY 2010 www. C ANADIAN Law ye rmag.com DeMerchant and Sukonick also acted in additional matters for the same constel- lation of clients, involving, according to the law society, further conflicts of inter- est. One was Black's renunciation of his Canadian citizenship, which may have had adverse tax and other consequences for Hollinger International. The nub of the complaint is that the lawyers, and thus by extension Torys itself, helped one client, Black, to the detriment of another, Hollinger International (a public company). If that's true, they all made a big and obvious ethical mistake. We should be appalled. We shouldn't be surprised. Black is a powerful presence. When this drama was unfolding, he ran Hollinger with an iron fist. It would be a very unusual lawyer who tried to stop Black acting to the possible detriment DARCY MUENCHRATH