It's Not Necessarily What You Say That Counts, It's What You Memorialize in E-mails and IMs.

[ by Melanie Gretchen and Howard Haykin ]

DLA Piper was sued by client Adam Victor, CEO of TransGas Development Systems, who first engaged the firm in 2010 to prepare a bankruptcy filing for one of his companies.  A month after the filing, a lawyer at the firm warned colleagues that hte businessman's bill was mounting - something like $200K over estimate.

But what may be troubling for the world's largest law firm - as measured by numbers of lawyers - is that the decision in this case may not rest on which side presented more credible "he said, she said" testimony.  

No, DLA Piper appears to have a tangible problem on its hands.  Or even 250,000 tangible problems.  That's the number of pages that the plaintiff's lawyers received in discovery from defendant DLA Piper.  And for the record, what C-I refers to as "smoking gun evidence" is among those 250K documents. 

Sweeping Practice of Overbilling.   The moment Mr. Victor received his first bills, he began to complain about the high costs - and how they often were matched by the subpar work of associates.  Mr. Victor refused to pay his legal bills, which led DLA Piper to sue Mr. Victor and his firm for $675,000 in unpaid legal bills.

Mr. Victor, in turn, filed a counterclaim, which led to the unveiling of e-mails pertaining to the billing account of Mr. Victor's company.   Choice phrases include 1 of 3 lawyer's comment on a client's case: "I hear we are already 200k over our estimate — that’s Team DLA Piper!"  [C-I Note: Ouch.]

"As the firm got bigger, there were all of these lawyers who I didn’t know suddenly showing up on my bills." -- Mr. Victor., in his countersuit.

As of last week, Mr. Victor's countersuit includes a fraud claim and a request for $22.5 million in punitive damages, a number representing 1% of DLA Piper’s reported revenue last year, according to his lawyer, Larry Hutcher at Davidoff Hutcher & Citron.

For further details, go to [Dealbook, 3/25/13].

To contact Melanie Gretchen: melanie@compliance-insights.com.