A law firm accused of a conflict of interest by Airgas has represented Air Products for more than 40 years, a long-term relationship that could help the firm dodge the conflict charge.

In its $5.1 billion bid for Airgas, Air Products is using the services of New York-based Cravath, Swaine & Moore LLP, a law firm that has done work in the past for Airgas. That prompted Airgas to sue, hoping to persuade a judge that Cravath has a conflict of interest by representing Air Products. Airgas has rejected Air Products takeover offer.

Cravath has worked consistently for Air Products for at least 43 years, according to Air Products officials. That was well before Airgas Chief Executive Peter McCausland even founded his company in 1982. Cravath worked for Airgas from May 2001 until October 2009, when it decided it could no longer work for Airgas in light of Air Products brewing offer.

Courts tend to frown on law firms that drop one client for a higher-paying one, but in this case Cravath's history likely will bode well in the court's eyes, said Georgetown University Law Center professor Milton Regan, a specialist on ethics in the legal profession.

"The fact that Air Products is a long-standing client is one that weighs in Cravath's favor," Regan said. "It's not as though they dropped Airgas to represent a new, lucrative client that just appeared on the scene."

Nature Of Work
Each side is disputing the exact nature of Cravath's work for Airgas. According to a source close to Air Products, Cravath only provided minor financial work for Airgas, including helping with financial bond filings, and never had access to proprietary information.

But in its lawsuit, Airgas says Cravath had access to "intimate knowledge of Airgas's operations, finances, executive personnel and their agenda, and corporate expansion and differentiation strategies."

Airgas also says Cravath provided counsel when Airgas' president and chief operating officer left in 2005.

"Of course there's going to be different depictions of what Cravath was doing for Airgas," Georgetown's Regan said. "I would imagine there's going to have to be some fairly detailed analysis" in court.

The exact location of where the conflict-of-interest case will be heard is currently up in the air. The case was first filed in Pennsylvania state court, before being transferred to federal court in Philadelphia.

Air Products now wants a Delaware court to hear the case, but Airgas has asked a Delaware judge to let the court in Philadelphia hear the matter first.a