Add this blogCircle of Greed - A Look Into the Mind of the Class-Action Plaintiff's Lawyer
I’ve written before about how – the odd beauty contest aside – the plaintiffs’ bar often seems as opaque as the Cold War Kremlin to defense lawyers. Journalists Patrick Dillon and Carl M. Cannon have done their part for class-action glasnost, however, with their new biography of William Lerach, Circle of Greed: The Spectactular Rise and Fall of the Lawyer Who Brought Corporate America to Its Knees.
Bill Lerach (pronounced LEER-ach) – who was to become one of the most feared lawyers in the class-action plaintiffs’ bar – was born in Pittsburgh, and graduated from the University of Pittsburgh Law School. (While he was there, he wrote a law-review comment critical of class-action settlements.) He started his career at Reed Smith, before joining forces with Mel Weiss of Milberg Weiss, and moving to San Diego to open Milberg’s west coast office. (That office later split to form Lerach Coughlin, now Coughlin Stoia.)
From that point, Lerach’s career took off. He was at the forefront of a number of big moments in class-action litigation. He perfected the pre-PLSRA securities suit. He helped develop the “fraud-on-the-market” theory that allows plaintiffs to presume reliance in certain kinds of securities class actions. He was a pioneer in developing “scheme liability. And he took on a number of large corporations, including NuCorp, Worldcom, and Enron. He was poised to sue contracting giant Halliburton when he finally pled guilty to criminal conspiracy.
Ultimately, Lerach was undone by his own excesses. In his race to the courthouse to be the first to file, he had kickback agreements with several named plaintiffs. He paid one of his experts on contingency (a practice discouraged by most ethics rules). His early strategies gave rise to the Private Securities Litigation Reform Act (sometimes known colloquially as the “Get Lerach” Act). And his lawsuit against Lexecon consultant (and University of Chicago law professor) Daniel Fischel ultimately backfired and cost him and his firm more than $50 million in cash.
The authors tell the story well. They’re prone to easy moralizing in places (both against Lerach and the corporate defendants he sued), but for the most part they confine themselves to the facts they have unearthed. And they do provide an informative portrait of the development of much of today’s securities class-action practice.
The book’s biggest draw for class-action practitioners, however, is that it offers an invaluable, up-close portrait of one of the leading plaintiffs’ lawyers, and even an occasional look into plaintiffs’ tactics and strategies.
What lessons can we learn from this biography? Come back on Thursday to find out.
Andrew Trask has defended more than 100 class actions, involving all stages of the litigation process. While his work has
I look forward to reading the book and, as a plaintiff's lawyer, hope that draws an appropriate line between the conduct of people like Learch and the rest of us who practice law consistent with the rules of law and ethics.
[This comment has been edited by the administrator.]
John,
Thanks very much for your comment. I made one small edit to delete something that could be construed as a personal attack. I think the remainder of your post still gets your point across.
And, from my reading of the book, the authors do draw the line between Lerach's conduct and the conduct of other plaintiffs' lawyers who adhere to ethical rules, including some at his former firms.
Andrew