Legal malpractice cases are ubiquitous an pop up everywhere attorneys handle problems for people. We’ve wondered how a firm like Dewey (and its predecessor LeBoeuf, Lamb) are handled at the highest levels, and how a firm such as Dewey implodes. Was it a big big legal malpractice case brought by the State of Missouri? Take a look at thisAM Law Daily article., by Sara Randazzso.
"On February 15, with Dewey & LeBoeuf entering what would prove to be its death spiral, the firm quietly settled a $3 billion malpractice suit filed against it in Missouri three years ago by state insurance regulators who accused predecessor firm LeBoeuf, Lamb, Greene & MacRae of participating in a conflict-riddled scheme to push General American Life Insurance Co.—at one time the Show Me State’s largest life insurer—into insolvency and, ultimately, the hands of fellow LeBoeuf Lamb client MetLife.
The abrupt dismissal of the case less than a month before it was to go to trial came amid a stream of partner departures and mounting concerns about the firm’s financial condition, but it is hard to know whether resolving it added to the fiscal woes that ultimately doomed Dewey to oblivion. That’s because, three months later, the settlement’s terms—and details about how much money the firm agreed to pay out—remain shrouded in secrecy.
The Missouri Department of Insurance’s Web site lists the settlement amounts paid by three other defendants targeted in related suits—accounting firm KPMG ($18 million), Morgan Stanley ($95 million), and Goldman Sachs (just over $100 million)—that have contributed to $1.425 billion in distributions that General American’s holding company had dispersed to some 300,000 policyholders as of September 2009. (A final distribution for an undisclosed amount is scheduled for later this year.)
No such information is available about the suit against Dewey. All the insurance department Web site says on the subject is that as of February 2012, "The Dewey & LeBoeuf case has been resolved." Contacted for comment by The Am Law Daily, insurance department spokesman Travis Ford declined to elaborate on that single sentence. A mid-February court filing simply says the case has been dismissed with prejudice by stipulation and that the parties must bear their own costs.
One person familiar with the settlement would only say the amount Dewey agreed to pay was less than KPMG’s $18 million settlement figure and should be covered by the firm’s professional liability policy. According to a second source familiar with the firm’s operations, that policy has a $300 million cap and a $2 million deductible, was brokered by AON, and was issued by Bar Insurance and Reinsurance, a company incorporated in Bermuda that provides professional liability insurance to an unspecified number of large law firms. Richard Howe, a Bar Insurance director and of counsel at Sullivan & Cromwell in New York, declined to confirm that Dewey is among the firms served by the insurance group."