Even After Paying Bills, Client Can Sue Reed Smith for Claimed 'Churning'
A Pennsylvania nonprofit that claims it was overbilled by Reed Smith in a routine employment discrimination defense that was originally estimated at $50,000 and eventually racked up almost $1 million in attorney fees and costs, has been given the green light to proceed with the case.
Overruling four of five preliminary objections raised by the 1,500-attorney Pittsburgh-based international law firm, Lawrence County Common Pleas Court President Judge Dominick Motto held, among other rulings, that Bair Foundation’s payment of the firm’s legal bills did not operate as a waiver or estoppel of its claims that Reed Smith overcharged, reports the Legal Intelligencer.
However, the judge did dismiss an unjust enrichment claim in the contract-based lawsuit, which also alleges negligence and breach of fiduciary duty. Bruce Fox of Obermayer Rebmann Maxwell & Hippel in Pittsburgh, who represents the Christian foster care foundation, says the dismissal doesn’t affect core “fee-churning” claims.
William Pietragallo II, who practices at Pietragallo Gordon Alfano Bosick & Raspanti in Pittsburgh, represents Reed Smith. He says the firm will now focus on factual defenses, according to the article.
Reed Smith now has 20 days to answer the foundation’s complaint. In addition to paying almost $1 million in legal fees, the foundation reportedly lost the two employment cases, which claimed religious discrimination.
Earlier coverage:
ABAJournal.com: “Fee Suit Against Reed Smith Claims Bigger Isn’t Better”
