Legal Malpractice

Everyone is Talking about "BigLaw" Legal Malpractice

By (Andrew Lavoott Bluestone)

Here is an exerpt from the Wall Street Journal law blog on two legal malpractice cases, one involving Nixon Peabody and one involving Wilmer Hale.

"Ah, clients. Can’t live with ‘em, can’t live without ‘em.

Judging from a couple stories out today, executives from a couple of law firms might have found themselves muttering the above statement in recent days. For starters, the Recorder dug up an interesting lawsuit raging between security-software maker McAfee and its former law firm, WilmerHale. The company is disputing $12 million in legal fees incurred in the trial of former McAfee Chief Financial Officer Prabhat Goyal. Along the way, McAfee is accusing the firm of fraud, theft, negligence and breach of fiduciary duty.

“[WilmerHale] intentionally overworked and churned the representation of Goyal; shamelessly employing over 100 WilmerHale timekeepers in the feeding frenzy,” McAfee alleged in a complaint filed in the Eastern District of Texas earlier this year. (Click here for a copy of the company’s third amended complaint.)

Goyal was charged with accounting fraud and convicted by a San Francisco jury in May 2007. In its latest motion to dismiss, filed Thursday, WilmerHale noted that the case required the production and review of 1.2 million documents.

Paul Yetter, the Houston lawyer representing WilmerHale in the fee dispute, said by e-mail Monday to the Recorder that “over 80 percent of the defense work was done by two lead WilmerHale partners and a handful of associates. The bulk of other timekeepers were needed for review of 1.2 million documents in the case.” Yetter also provided a statement from WilmerHale that said its fees “reflect legal services that were necessary and reasonable in a lengthy and complex matter encompassing five separate cases, particularly one in which Mr. Goyal’s very liberty is at stake. Indeed, the California judge commended the firm’s efforts as ‘extremely well-tried.’”

In other law-firm-client smackdown news, an appellate court in New Jersey ruled that an intimate apparel company can move ahead with its legal malpractice claim against Nixon Peabody and Wolff & Samson. Here’s the story from the NLJ.

The three-judge panel, in noting that their decision expressed no opinion about the merits of the case, determined that a prior settlement with other defendants in a related case did not block a lawsuit against the law firms.

The decision stems from a family feud over control of Van Mar, a women’s intimate apparel company. Members of the family eventually settled their differences. But the plaintiffs claimed that attorney Frank W. Ryan Jr., a partner at Nixon Peabody, and Paul M. Colwell, a partner at Wolff & Samson, breached their contract to provide legal services to Van Mar and helped defraud them out of their interest in the company.

Colwell did not respond to messages seeking comment. Nixon Peabody declined to comment "

Full post as published by New York Attorney Malpractice Blog on July 24, 2008 (boomark / email).