In a different but related case, Anthony Lin of the NYLJ goes on to tell about "top private equity firm Thomas H. Lee has sued Mayer, Brown, Rowe & Maw for $245 million for allegedly misrepresenting the financial shape of commodities brokerage Refco prior to Lee’s acquisition of a controlling interest. Seward & Kissel is also a defendant in a $200 million lawsuit brought by institutional investors who lost money when one of the law firm’s hedge fund clients went under.

There are a number of reasons investment fund clients may be more willing to bite the hand that lawyers them when things go wrong. For one thing, there is almost always a lot of money on the line, and given the nature of their business, investment fund principals experience losses in a more visceral way than, say, corporate executives.

"It’s up close and personal," said Leslie D. Corwin, a partner at Greenberg Traurig specializing in business disputes involving law firms. When fund principals’ expectations of making massive amounts of money are thwarted, he said, they cast around for people to blame.

Law firms are more in the line of fire because they play a much bigger role at investment funds than they do for corporate clients. Even though funds may control companies with large in-house legal departments, they sometimes lack even a general counsel themselves. They therefore develop unusually close relationships with outside lawyers, and feelings can be unusually hard when things do not go well.

"Hedge funds are oftentimes run as if they are small businesses, so every decision matters a lot more to the proprietor," said Barry Barbash, head of the funds practice at Willkie Farr & Gallagher. "The client relationships are more intense and can become more confrontational."

But, from another perspective, Scott Greenfield sees this downturn in mortgages as a new vista for white collar [and potentially, white shoe] criminal defense attorneys.

For a while, a million dollar or a multi-million dollar case was a big number.  Imagine, not just several hundred thousands!  Now, Anthony Lin of the New York Law Journal reports that Akin Gump has been sued by a hedge fund client for $ 4 Billion.  Will we be seeing larger than life numbers like this in failed real estate and mortgage  transactions, failed hedge funds, failed REIT transactions in this new economic downturn? 

"Like most hedge fund managers, James McBride and Kevin Larson expected to make a tidy sum. By the fall of 2003, they seemed well on their way. The series of Veras funds they had launched less than two years before had already attracted around $1 billion in investments.

But then regulators, including then-New York state Attorney General Eliot Spitzer and the Securities and Exchange Commission, came after the Veras funds for "late trading," the illegal purchasing of mutual fund shares after the 4 p.m. market close. Veras wound up paying more than $36 million in penalties before shutting down. McBride and Larson each paid $750,000 and were barred from the industry.

But the ex-fund managers are still out for big money, this time from the law firm they claim advised them that late trading was legal. In February, the former hedge fund managers filed suit against Akin Gump Strauss Hauer & Feld in Manhattan Supreme Court.

Their damages claim? A whopping $4.4 billion, not including punitive damages.

Akin Gump has denounced the suit.

"The allegations of wrongdoing in Veras’ Complaint are without merit. At all times, Akin Gump acted ethically and in its client’s best interests," said firm spokeswoman Kristen White. "Akin Gump is forcefully defending this case, and we are confident we will prevail."

The suit illustrates the risks law firms face as they try to reap the rewards of representing private investment funds, including hedge funds and private equity funds. Such funds generate high legal bills for firms, but they are apt to strike back hard when they feel lawyers have led them astray."

Its often said that jailed defendants have a little too much time on their hands.  Here is a prime example.  This defendant was convicted of trying to kill his wife.  He seems to have used poor workmen.  One would be killer was arrested for tresspass; one had a battle with the wife, but agreed to leave after a little discussion.  Both testified against the defendant. 

"Donald Millard – convicted last year of hiring two assassins to attempt killing his ex-wife – is suing his attorneys for losing at trial. Millard’s suit does more than allege that Salt Lake City attorneys Walter Bugden and Tara Isaacson did a poor job of defending him. Millard – who is serving five years to life at the Utah State Prison – claims breach of contract, contending Bugden and Isaacson had all but promised him an acquittal.

They allegedly told Millard his case "would be an easy one to win," according to the lawsuit, filed last week in West Jordan’s 3rd District Court.
Millard’s current attorney, David Drake, said Monday, "I’m appalled at what I’ve seen in this case."
Drake said the court records and trial transcripts show that Bugden and Isaacson failed to investigate several legal avenues, failed to obtain records rebutting the stated motive for the crime and failed to impeach witnesses.
Millard wants to be repaid the $137,000 in fees he paid to Bugden and Isaacson, as well as $100,00 in punitive damages. "
 

All right, its not strictly legal malpractice, but this story about Family Court Judges bickering and fighting, slamming files and being childish should remind us that these cases involved  parents and kids.  Family Court:  they must have involved custody and support.  Who was the victim here?

"One instance involved a sharply disputed tussle with Judge Monica Drinane (See Profile) over which of the two judges could require an attorney to be in their courtroom. Judge Shelton also quoted from an e-mail that Judge Drinane had sent her apologizing for the incident.

According to the commission’s complaint, when Judge Drinane entered Judge Shelton’s courtroom to discuss the issue, Judge Shelton told her to "step out of my courtroom, please," and directed a court officer "to shut the door on Judge Drinane."

When Judge Drinane again asked to speak to Judge Shelton, the complaint stated, Judge Shelton responded, "Monica, you are literally over the top."

In her answer, Judge Shelton described Judge Drinane as approaching her "confrontationally, in robes with arms crossed over her chest."

Judge Drinane’s comment, "I want to speak to you," the answer further asserted, was a "polite rendition" of what was actually said because "the court reporter has frankly admitted to Judge Shelton that he was hesitant even to record the embarrassing scene created by Judge Drinane."

What should not be forgotten either:  once these problems developed and the cases were troubled, was an attorney blamed? 

Here is an interesting blog blurb  from the North Carolina Appellate Blog on how an innocent client was seriously hurt by the acts of its attorney.

"Today the Court of Appeals (COA) issued a harsh reminder that a client is, under the law of agency, responsible with the bad conduct of its counsel in almost all instances. The case is Purcell Int’l Textile Group, Inc. v. Algemene AFW N.V., et al.

Here’s what happened. Plaintiff sued a number of businesses alleging contract, tort, and Chapter 75 claims after Defendants terminated certain commercial agreements. Attorney W. Rickert Hinnant were retained by Defendants to represent them in the litigation.

Hinnant began settlement negotiations, reached a settlement, and announced the settlement in open court on the trial date. Hinnant then prepared a settlement agreement, committing Defendants to pay $850,000 in three installments over a 6-month period. Hinnant sent Plaintiff settlement agreement signed by Defendants. Or so it seemed.

The trouble is, Hinnant never sent them the written settlement agreement or even told his clients about the settlement. Instead, he forged their names to the agreement after negotiating it without their consent or knowledge. He never had authority to settle for the amount he did.

Unsurprisingly, Defendants defaulted on the payment under the settlement agreement, since they didn’t know about it. This prompted Plaintiff to file a motion to enforce the agreement, which resulted a judgment for $850,000 plus attorneys fees of 15% (as provided in the settlement agreement) as well as an order attaching assets of Defendants.

The first time Defendants learned of the settlement agreement was when they learned the court had entered that judgment against them. They moved under Rule 60(b) for relief from the judgment, urging that Hinnant committed fraud on the court and exceeded his authority. The trial court rejected the motion, and the COA affirmed

Another report of the question of privity and legal malpractice, here in an executor-estate setting.

"In January 1994 the decedent Miguel Perez (hereinafter the decedent) commenced a medical malpractice action (hereinafter the underlying action) against Lutheran Medical Center (hereinafter Lutheran) alleging a failure to timely diagnose and treat his colorectal cancer condition. The decedent was represented by the defendant, Richard J. Katz. Thereafter, on September 16, 1994, the decedent executed his Last Will and Testament (hereinafter the Will), naming the plaintiff, his brother, as executor. The Will was retained in the defendant’s possession. On February 5, 1995, the decedent passed away from an unrelated cause.

The defendant alleged that soon after the decedent’s passing, he informed the plaintiff of the necessity of probating the Will in order to pursue the underlying action. However, the plaintiff [*2]did not retain the defendant or any other attorney for this purpose at that time. On May 14, 1997, more than two years after the decedent’s passing, the plaintiff went to the defendant’s office, obtained the Will, and signed an affidavit stating that he was taking the Will "for the purposes of having it probated by the Surrogate of Kings County." Nevertheless, another four years passed before the plaintiff took any steps to probate the Will. In fact, the plaintiff did not obtain provisional letters testamentary until December 28, 2001.

In August 2002 the Supreme Court granted a motion by Lutheran made pursuant to CPLR 1021 to dismiss the underlying action for failure to timely substitute a legal representative following the death of the decedent. Shortly before the motion was granted, the plaintiff commenced this legal malpractice action against the defendant alleging that he failed to timely move to substitute a legal representative in the underlying action. The defendant moved for summary judgment dismissing the complaint. In the order appealed from, the Supreme Court, inter alia, denied the motion finding that there were triable issues of fact. We reverse the order insofar as appealed from.

In this ‘il Kim Case the AD reversed and reinstated a judgment against her, based upon her attorney’s negligence. 

 "To vacate her default, the defendant Kimberly Jones, a/k/a "Lil Kim," was required to demonstrate a reasonable excuse for not opposing the plaintiff’s motion and a meritorious defense to the motion (see CPLR 5015[a][1]; Piton v Cribb, 38 AD3d 741, 742; Yurteri v Artukmac, 28 AD3d 545, 546). Jones failed to present a reasonable excuse. Where, as here, there is a pattern of default and neglect, the attorney’s negligence can properly be imputed to the client (see Dave Sandel, Inc. v Specialized Indus. Servs. Corp., 35 AD3d 790, 791; Edwards v Feliz, 28 AD3d 512, 513; MRI Enters. v Amanat, 263 AD2d 530, 531). Accordingly, the Supreme Court should have denied Jones’ [*2]motion to vacate. "

Being Sued – terrible

Losing the suit – worse

Jailed?    This story tells of the worst possibility.  "Three lawyers accused of bilking their clients in a diet drug settlement were jailed Friday after a federal judge agreed to delay their trial date but revoked their bond.

The attorneys, including two co-owners of Preakness winner Curlin, were remanded to custody during a hearing in U.S. District Court in Covington, according to an order filed in the court clerk’s office.

Judge William Bertelsman agreed to the lawyers’ request to push the trial date back to Jan. 7, 2008. It had been set for Oct. 15.

Shirley Cunningham Jr. and William Gallion, who own 20 percent of Curlin, were jailed, along with another lawyer, Melbourne Mills Jr. "