The Rise and Fall of Lerach
March 2, 2010
The New York Times Deal Blog has a good, extensive review of a brand new book that describes the rise and fall of trial lawyer titan, Bill Lerach. The book’s title: Circle of Greed.
An excerpt from the review describing how Lerach began his rise to fame:
“’…Mr. Dillon and Mr. Cannon trace how…Milberg Weiss Bershad Hynes & Lerach, began paying secret fees to people who agreed to serve as the representative plaintiff in their cases. In those days, securities class actions were a race to the courthouse, with the first to file often controlling the litigation. Called ‘pets,’ these plaintiffs were lapdogs willing to serve Milberg Weiss while taking a cut of any settlement in the case, while telling the court that they had received nothing more than what any other class member got from the case.’”
And how his tremendous fall began:
“[F]ederal prosecutors in Los Angeles in late 1999 began the painstaking task of putting together a criminal case against the firm and four of its name partners for making secret payments to plaintiffs and an expert witness. The criminal case began almost by accident when one of the “pet” plaintiffs, trying to avoid a substantial prison term, spilled what he knew about Milberg Weiss. Over the next nine years, prosecutors painstakingly pulled together a case that resulted in the conviction of four of the named partners in Milberg Weiss and the firm itself.”
Unfortunately the reviewer, Peter Henning, misses the point of what Bill Lerach represented when he writes:
“But was his crime all that significant? In one sense, the answer is ‘No’ because it is hard to identify any real victims from making the secret payments. But the answer is ‘Yes’ because Mr. Lerach showed an utter disregard for the legal system, and any defense of the Milberg Weiss payments devolves into an argument that ‘the end justifies the means.’”
Yes, Lerach represents unchecked arrogance and the utter disregard for our legal system. But his crimes were far from “victimless.”
Those of us who have been fighting in the trenches for many years against unscrupulous trial lawyers know all too well that Bill Lerach stood as the singular example of jackpot justice and trial lawyer greed. The abusive actions of Lerach and dozens of others like him have cost every one of us very dearly. Many American Courthouse readers know the stats well – but here’s just one: according to the 2008 Towers Perrin study on US tort costs, every man, woman and child in the U.S. pays a “lawsuit tax” of $835 per year. That’s more than $3300 a year for a family of four. We pay this tax through higher prices for products and services due to the ever-increasing costs of litigation…all brought to you by the likes of sleazy Bill Lerach.