Counsel Explains Why Milberg Settled: Law Firm Survival
In the aftermath of the official announcement of a $75 million settlement in the never-before-seen criminal indictment of a major U.S. law firm, a lawyer representing Milberg explains why the firm entered into the plea agreement.
The answer to that question, attorney William Taylor III tells American Lawyer, is simple: survival. If the renowned plaintiffs securities firm had gone to trial in federal court in Los Angeles over its alleged corporate responsibility for illegal kickbacks admittedly paid by now-former senior partners to lead plaintiffs in securities class actions, that could very well have brought about Milberg’s dissolution.
“The firm had to accept terms which were onerous financially,” he says, and “I can’t tell you I’m happy my client has to pay $75 million.” However, “the firm will survive. Its lawyers can practice law,” Taylor tells the legal magazine. “It will be tight [financially] but they have a platform that is well-established [and] they’re very good at what they do.”
As part of the settlement, Milberg now becomes the first U.S. law firm with a federally mandated monitor overseeing its operations.
As discussed in previous ABA Journal coverage, the unprecedented indictment was controversial because it potentially holds an entire law firm responsible for the misconduct of a relatively small number of lawyers. But, given the power that federal prosecutors can wield over law firms and corporations by indicting them—or even threatening to do so, going to trial in such cases is almost undoubtedly a bet-the-farm strategy that few are bold enough to employ.
Additional coverage:
ABAJournal.com: “Editorial Urges Prosecutors to ‘Keep Digging Into Tort-Bar Practices’”
ABAJournal.com: “Convicted Milberg Partners Accused in Lawsuit of Draining Firm’s Assets”
ABA Journal (2006): “Milberg Weiss on the Hot Seat”
