On Tuesday, I provided a brief review of the Lerach biography Circle of Greed. Today, I want to focus on what some of the stories about Lerach can reveal about the psychology of the class-action plaintiffs’ lawyer.

I freely concede that this is about as unscientific an inquiry as one can make. For better or for worse, William Lerach was an extreme case. (He was extremely successful plaintiffs’ lawyers, but the extremes he went to also landed him in jail for two years.) So, many plaintiffs’ lawyers may have some of these characteristics, but likely not to the same degree as Lerach did. Nonetheless, the insight into Lerach’s psychology provides a few insights into what may make one kind of successful plaintiffs’ lawyer (page cites are from the book):

  • Plaintiffs’ lawyers are competitive, even with each other. Lerach’s “firm so dominated the field of class action securities lawsuits that ‘if other firms did not come to us with California cases, they very much risked being excluded altogether from these cases.’” (89)
  • You don’t have to be paranoid to be a plaintiff’s lawyer, but it helps. “Lerach’s mind was conditioned to think of the possible grift first, the innocent explanation second.” (79)
  • Plaintiffs’ lawyers are not above making the fight personal. After Lerach had clashed with defense expert Daniel Fischel of Lexecon, he authorized “opposition research” to build a dossier on Fischel, worrying even his partner, Mel Weiss. (Disclosure: Daniel Fischel was my Corporations professor in law school.) (160)
  • Sometimes, very personal. In a case against the Washington Public Power Supply System, Weiss and Fischel crossed paths. Fischel held out his hand and introduced himself. “‘I know who you are,’ Weiss sneered, ‘And I will destroy you.’” (164)

Why bother to look at how two plaintiffs’ lawyers (Lerach and Weiss) looked at the world? Because some of what we learn may apply more broadly. Milberg Weiss was not the only plaintiffs’ firm that played hardball with other plaintiffs’ firms. Nor is Lerach likely to be the only plaintiffs’ lawyer who winds up viewing all corporations with suspicion. (Much as many defense lawyers are eventually conditioned to view plaintiffs’ lawyers with suspicion.) Understanding what drives one’s adversary allows one to better respond to their strategies, whether in the courtroom or across a settlement table.

Next Tuesday, I’ll take one last look at this book, and pull out some of the more common tactics class-action plaintiffs (including Lerach) have used.

  • As an experienced plaintiffs’ lawyer, I’ll share with you the single most important point about being a plaintiff’s securities class action lawyer.

    On my first day starting as a clerk at Lowey Dannenberg & Knapp, Steve Lowey told me that the threshhold decision is whether you are a lawyer first or a businessman first, stating “Businessmen make more money because they file more cases.”

    Thus, the key to business success is to file hundreds of cases against solvent entities regardless of how weak is the claim of liability. Settle a dozen cases a year for next to nothing on the dollar with enough zeroes after the numbers, and you have steady cash flow and large profits.

    Bad money drives out good money. Crooked plaintiffs’ lawyers drive out honest plaintiffs’ lawyers.

    The defense bar does nothing to stop the shenanigans because it’s all billable time, so the more the merrier.

    Lerach is the “Poster Boy” of the crooked plaintiff’s class action lawyer, but he’s far from unique.

    With few exceptions, the plaintiffs’ securities class action bar is a cesspool of criminals enriching themselves to the detriment of their supposed clients.

    It’s enough to restore your faith in cynicism.

  • Thanks very much for your comment. The book does touch on part of what you’re talking about here, that plaintiffs’ shops do use a steady stream of settlement money to fund larger cases. (That’s actually one of the tactics I was going to mention in next Tuesday’s post.)

    Any other plaintiffs’ (or defense) lawyers out there want to weigh in?

  • tde

    I am a plaintiff’s lawyer.

    I’ve dealt with a number of dishonest and despicable defense lawyers – people who did things that make Lerach’s posturing above seem positively benign.

    That said, I can’t imagine that I would use from those unfortunate examples to describe “defense lawyers” generally. To do so would be, to put it kindly, sloppy thinking.