$9M Malpractice Suit Sparks Finger-Pointing Among Multiple BigLaw Firms
A former accounting and financial client says Morgan Lewis & Bockius committed malpractice and is suing for a return of $9 million in fees. Morgan Lewis not only says that it did not commit malpractice, but it is seeking sanctions against plaintiff BDO Seidman and its counsel, DLA Piper, for what Morgan Lewis calls a “sham” complaint in a February motion to dismiss.
Meanwhile, a third party has been heard from and is arguing in the Washington, D.C., superior court case that Gibson Dunn & Crutcher is conflicted out of representing Morgan Lewis in the BDO case, reports the National Law Journal.
At issue are some tax shelters offered by BDO subsidiary, the Tax Solutions Group, that the Internal Revenue found to be illegal in 2000. Seeking to hold five current and former Morgan Lewis lawyers accountable for what the complaint says was bad advice, BDO sued. Morgan Lewis says it never advised the Tax Solutions Group on any of the tax shelters concerned.
“There was nothing that Morgan Lewis knew about to warn BDO [about] concerning BDO’s own conduct. … There was nothing more BDO needed to know,” says partner James Fogelman of the Los Angeles office of Gibson Dunn. He is defending Morgan Lewis.
Partner Lucinda Bach of the Washington, D.C., office of DLA Piper is the lead lawyer for BDO.
Judge Brook Hedge hasn’t yet ruled on a March motion by Morgan Lewis seeking sanctions for claimed false statements made by BDO and DLA Piper in the complaint, the NLJ recounts.
But later that month the judge did grant a motion to intervene by BDO’s former general counsel, Scott Univer. Represented by Bingham McCutchen in the malpractice case, he contends that Gibson Dunn is conflicted out because it also represented him for several years while he has been a potential witness in a criminal investigation of the tax group, the article explains.
Gibson Dunn says it has done nothing wrong; an appropriate ethical screen went up in January 2009. But Univer says his consent was required and was not granted.
