Well, not for simply hiring an e-Discovery company, but for hiring a pet e-Discovery company which egregiously overbilled might lead to liability for the law firm.  We look at FTI Consulting, Inc. v CT Miami, LLC  2018 NY Slip Op 31923(U)  August 6, 2018  Supreme Court, New York County
Docket Number: 654062/2016  Judge: Melissa A. Crane for a second day.

“The following facts are from the third-party complaint (TPC). Akerman, a law firm, represented CT Miami in connection with a certain Florida litigation (the Florida litigation) (TPC, ¶2-3, 5). While that matter was ongoing, Akerman recommended that CT Miami hire an e-discovery company, plaintiff FTI Consulting, Inc. (FTI) to provide support services (TPC, ¶ 8-9). CT Miami hired FTI in September 2013 (id., i!7). CT Miami claims at that time the estimated cost of FTI’s services the parties agreed to was $4,900 (id., ¶ 8-10). CT Miami also claims that “Akerman explicitly  confirmed” that it was only obligated to pay the $4,900 estimate amount (id.,¶ 15).

Nevertheless, “[i]n late 2013 and early 2014, CT Miami began to receive outrageous bills from plaintiff, in amounts in excess of $100,000” (id.,  21 ). CT Miami claims it was unaware that FTI had undertaken further work beyond the $4,900 estimate and expected to be compensated for this work (id., 22). CT Miami also claims that, “[t]he Florida litigation did not require e-discovery in the scope billed by plaintiff’ (id., 23). When it raised the issue with its counsel, Akerman urged CT Miami to just pay FTI’s bill (id., 25-28). CT Miami claims that Akerman had a preexisting relationship with FTI and was interested in maintaining that relationship to the detriment of CT Miami (id., 32-33). When CT Miami refused, FTI commenced an action against it (the main action) (id., 29). CT Miami now brings this third party action against Akerman for: (1) breach of contract; (2) declaratory judgment; (3) breach of fiduciary duty; (4) contribution/indemnification; and (5) negligence. ”

“It is well settled that the relationship of client and counsel is one of ‘unique fiduciary reliance”‘ (Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9 [1st Dept 2008] [citing Matter of Cooperman, 83 NY2d 465, 472 [1994]). CT Miami claims that it hired FTI based solely on Akerman’s recommendation and trusted Akerman to oversee that relationship. Akerman, in tum, claims that the plain language of FTI’s engagement letter makes clear that CT Miami obligated itself to pay all of FTI’ s bills. A client may reasonably rely on their counsel’s advice in choosing vendors and outside contractors. The court cannot determine on this motion what representations Akerman may have made to CT Miami with respect to the services that FTI would provide or how much they would cost. On this record, it is clear that CT Miami, at minimum, inquired and was concerned about the costs involved. Moreover, Akerman was aware of these concerns. On a motion to dismiss, the Court must credit CT Miami’s allegations that, among other things: (1) FTI was not authorized to undertake additional work, (2)that Akerman never discussed the charges this work would involve, (3) that Akerman prioritized its relationship with FT Miami over its fiduciary obligations to its client, and (4) that CT Miami had no knowledge of the e-discovery process and relied on Akerman to oversee that process (TPC, 22, 24, 26-28, 48-52). The claim for breach of fiduciary duty is, thus, sufficient. “

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.