Tuesday, November 7, 2006
Article in Fortune magazine -- The fall of America's meanest law firm, by Peter Elkind -- on the indictment of Milberg Weiss, the dominant plaintiffs' class action firm in America. While Milberg Weiss is primarily associated with securities litigation, the firm has also been involved in other mass tort litigation. The indictment alleges Milberg Weiss illegally paid the named class representatives for its cases. The Fortune article tells a tale worthy of a John Grisham novel, complete with shady characters and envelopes stuffed with cash. We may have to wait for the trial to see if it's true. Here's an excerpt from the beginning of the article:
For decades, few things have inspired as much fear and loathing in the executive suites of corporate America as the law firm of Milberg Weiss and the two outsized personalities who ruled the place, Mel Weiss and Bill Lerach. Through creativity and ruthlessness, they transformed the humble securities class-action lawsuit into a deadly weapon.
Always, Milberg Weiss cast itself as the champion of the little guy. In media interviews Lerach has spoken evocatively about fighting for the honest, struggling blue-collar worker who, through no fault of his own, had lost his hard-earned savings to corporate perfidy. The firm boasts of having collected $45 billion for cheated investors since its founding in 1965.
But somewhere along the way, the work made its ruling partners a little like the CEOs they sued. In an especially profitable year, both Weiss and Lerach personally made more than $16 million. Weiss, 71, is a high roller at casinos who collects Picassos, owns a five-acre waterfront estate on Oyster Bay, Long Island, and has a vacation condo in Boca Raton.
The Brillo-haired Lerach, 60, who bitterly split with Weiss in 2004, taking Milberg's San Diego-based West Coast operation along with him in a new firm, owns a home in Rancho Santa Fe, Calif., and vacation properties in Steamboat Springs, Colo., and Hawaii. Lerach travels the country in a chartered jet, says his exercise is drinking Scotch, and will be married this month for the fourth time, to a partner at his firm.