Reserve Management Company, which manages a $62bn money-market fund and currently is defending itself against an SEC lawsuit, has launched a suit of its own against Willkie Farr & Gallagher and one of its partners.  Reserve Management, which handled a money market-type fund that held $785mn in Lehman Brothers short term bonds, claims Willkie Farr committed legal malpractice because it had a conflict of interest which led to it giving bad advice in connection a 2009 SEC complaint. Willkie Farr's alleged conflict of interest arose when it represented both Reserve Management and its money market fund, Reserve Primary Fund.  Reserve Management argues that by representing both, Willkie Farr failed to negotiate an arrangement for Reserve Management that would make Reserve Primary Fund responsible for liability that the management firm might incur. Willkie Farr partner Rose DiMartino also was named as a defendant in the suit filed in New York County Supreme Court on 9/16/11.  Willkie Farr filed a motion 10/6 to have the case moved to federal court and heard by the same judge presiding over the SEC case, U.S. District Judge Paul Gardephe. The SEC Civil Case. The SEC lawsuit filed in May asserted that 2 days after Lehman filed for bankruptcy - on 9/15/2008 - Reserve Management tried to deceive the public by issuing statements indicating that the money-market fund was secure despite its Lehman holdings.  The fund eventually became unable to pay investors and currently owes them about $3.5bn, according to the SEC complaint.  Reserve Primary Fund is also a defendant in the same case. Reserve Management previously sued Dechert and K&L Gates for malpractice in other matters.  Both 2009 cases were withdrawn one month later.    [Reuters, 10/7/11]