Caveat Emptor – Corporate Clients Need to Beware, Too

A corporate client filed a legal malpractice and breach of fiduciary duty lawsuit on August 27, 2012 against the law firm and attorneys representing it in several securities class action litigations.  The lawsuit includes allegations that the firm and attorneys “engaged in a scheme of massive overbilling for premature and unnecessary legal work . . . that was performed for the sole purpose of padding the bills and seeking to enrich” the law firm.

In the Complaint, the corporation alleges the attorneys ignored repeated instructions to limit legal work, failed to advise of the automatic stay on discovery, and engaged in discovery despite the mandatory stay.

Instead of advising [the corporation] about the . . . discovery stay and heeding their requests to shut down the [law firm] billing machine, [the law firm] ignored [the corporation’s] request that this unnecessary work be stopped and simply continued to intentionally pad the bills.

The corporation further alleges that when it brought these issues to the firm’s attention, the law firm “ran to the Courthouse” on July 25, 2012 and filed suit against the corporation “to collect these unauthorized and improperly billed fees,” attaching as public exhibits the firm’s unredacted billings disclosing the corporation’s “litigation strategies and tactics.”

The law firm reportedly denies any wrong doing and contends that the corporation’s lawsuit is merely a “tactical response” to the collections action the firm filed.

LPR makes no judgment or comment about the competing lawsuits.  We are bringing these events to your attention to raise awareness among corporations that have retained or will retain lawyers to represent them.  Corporate personnel in charge of these legal services should be aware that some lawyers and law firms overcharge and understand how to effectively manage outside counsel to avoid fee disputes.  Ending up in a lawsuit like either of the lawsuits above is entirely avoidable.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

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Center for Legal Practice Reform
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