Law Firms

Bingham Must Pay Recruiter $1.9 Million for McKee Acquisition, Arbitrator Orders

Bingham McCutchen must pay a legal recruiter nearly $1.9 million for his role in the firm’s 2009 merger with McKee Nelson, a California arbitrator ordered yesterday.

Alan Miles arranged a 2008 meeting between both firms, Am Law Daily reported, and the arbitration centered on the validity of a 2007 agreement Bingham McCutchen and Miles signed. It held that Miles was entitled to a fee “on the sole basis of the introduction” between the law firm and lateral candidates who joined it.

Under terms of the agreement, according to Am Law Daily, Miles was entitled to 30 percent of candidate’s projected annualized base compensation. Also, the contract capped Miles’ fees at $1.5 million. Based on that, two months after the firm acquired 120-lawyer McKee Nelson in 2009, Miles sent Bingham an invoice for $1.5 million.

Bingham maintains that the contract’s inclusion of terms “merges” and “mergers” in the contract was a “mutual mistake,” and didn’t reflect the parties’ intent when the agreement was signed. Bingham initially offered to settle the matter with Miles for $500,000, but Miller chose to take the matter to arbitration.

The order, by retired U.S. District Court Judge Lourdes Baird, award’s Miles’ Santa Monica-based company $1.5 million in damages plus $268,356.88 in interest and $124,927 in costs.

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