Law Firms

Seyfarth Partner Sues Over Demotion, Claims Core Values Just a Marketing Tool

A Seyfarth Shaw partner who was demoted after a $30 million malpractice verdict that targeted his advice has sued his law firm in a complaint that derides its emphasis on profits.

Lawyer William Lancaster claims in the lawsuit (PDF) that he was forced to accept a demotion and an unfair pay cut, even as the law firm maintained that the malpractice verdict was without merit. An appeals court overturned the judgment in the malpractice case last February.

Lancaster became an equity partner in April 2000 and was demoted to nonequity status six years later. His suit claims he fell into a “morass of carefully redirected corporate change” at Seyfarth that emphasized profits over law practice.

The suit claims that “core values” adopted by the firm in 2003 or 2004 emphasized teamwork and an atmosphere of mutual respect, but in reality the values were only a marketing tool that had little internal application.

“Those values were in fact secondary to the pursuit and collection of money,” the suit says. In practice, the suit says, the law firm became a corporation, complete with a layer of nonlawyer managers who reported to managing partner Stephen Poor, who functioned more as a CEO.

The suit quotes from a 2005 compensation memo that stated, “The good citizen in this firm is the one who generates money.”

The functions of law firm managers “became principally not the practice of law, but the instigation of profit seeking and what Poor, referring to the “management of lawyers, called ‘herding cats,’ ” the suit alleges. “Poor occupied himself with the perquisites of management entirely to the exclusion of a law practice—at one point, dressed in a smoking jacket, he made a video, thereafter paraded through all of the firm’s offices, of himself leading a virtual tour through the newly remodeled and well-appointed offices of the firm in Chicago.

“By praise, applause, or veiled and open threats of dire consequence to individual compensation and other perils, the defendants’ chief occupation was urging partners and associates to bill time, get out their invoices on ever-accelerating schedules to clients, and collect quickly.”

It was in this atmosphere, the suit says, that Poor “brusquely interrupted” Lancaster during a 2005 preliminary compensation review. Poor told Lancaster he was a liability for the firm and the executive committee believed it would be best if he looked for work elsewhere. “Plaintiff was shocked by Poor’s attitude and words,” the suit says. Lancaster had a productive practice, yet Poor asserted he would not be able to get work from clients, the suit says. He was asked to leave again in a 2006 compensation meeting.

Lancaster refused to leave, submitted a counterproposal and then agreed to a demotion, made with the knowledge that he had no other options while the appeal was pending, the suit says. Also motivating the firm was a drive to de-equitize partners and increase profits for the remaining equity partners, according to the suit.

Lancaster alleges he was treated differently than others after his demotion, and he did not get proper billing credit. The suit claims breach of fiduciary duty, misrepresentation, infliction of emotional distress, unfair competition and unjust enrichment.

A Seyfarth Shaw spokesman told the National Law Journal that Lancaster’s suit was without merit and that the firm will “vigorously defend” itself.

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