“In Legal Malpractice Suits Against Am Law 200 Firms, Stranger Things Surfaced” —

• “Law.com Radar detected a raft of legal malpractice actions against the nation’s top law firms last month, including cases over ‘Stranger Things’ copyright claims, a busted marriage and a besmirched reputation. The platform detected 62 lawsuits in September involving Am Law 200 firms as litigants, 48 of which involved firms as defendants. By comparison, the platform flagged 53 new lawsuits in August involving Am Law 200 firms as litigants, including 36 cases against the firms. The numbers reflect a general increase in civil court filings in September, following a typical slowdown near the end of the summer season. Radar surfaced 171,379 new lawsuits in September, compared with 167,755 in August.”
• “Law firms Robins Kaplan and Boren Osher Luftman were hit with a lawsuit over millions of dollars in legal fees. The case was brought by their former client, Irish Rover Entertainment, which dropped its earlier copyright infringement action in August 2023 against Netflix over the smash hit ‘Stranger Things,’ a series about a group of kids in rural Indiana who confront creatures from the alternate dimension
• “Irish Rover’s suit against its two former law firms, filed last month, alleges that they had undisclosed conflicts in their simultaneous representation of an individual who provided funding for the litigation with interests that limited the firms’ representation of Irish Rover. The lawsuit, filed in California state court by Grant Shenon Almaraz, seeks to declare the fee agreements unenforceable and a determination that Irish Rover principal Jeffrey Kennedy is not personally liable for the fees.”
• “The suit follows an arbitrator’s decision, now on appeal by Irish Rover in a separate action, that awarded Robins Kaplan more than $1 million in fees and Boren Osher more than $523,250 in fees, according to the September lawsuit. Irish Rover’s September lawsuit also seeks the disgorgement of over $1.4 million it claims it paid the firms. The law firms did not respond to a request for comment.”
• “Meanwhile, former Orrick, Herrington & Sutcliff partner Kurt Mulville sued Fox Rothschild, claiming that one of its attorneys representing him in a divorce took a leave of absence to care for a sick family member. The pro se action, filed in California state court, claims that Fox Rothschild failed to notify Mulville of the lawyer’s leave and did not assign another lawyer to the case. The suit further claims that Fox Rothschild failed to appear in court on his behalf, triggering sanctions against Mulville, and ‘took no meaningful steps’ to advance his case, despite billing him for the firm’s work. Fox Rothschild did not respond to a request for comment.”
• “McDermott Will & Schulte along with Dechert and a lawyer who practiced at both firms were popped with a $75 million defamation suit filed by Eleni Tserpelis, a former partner at BDO USA. The federal lawsuit, filed in New York’s Southern District, alleges that attorney Michael Sheehan made false statements to legal news website Law360 claiming that Tserpelis was terminated from the accounting firm for performance failures. The suit, brought by Filippatos PLLC and Mesidor PLLC, also claims that Sheehan falsely asserted that Tserpelis used her son’s catastrophic medical condition as cover for her own shortcomings. McDermott Will, Dechert and Sheehan did not respond to a request for comment.”
• “… a wave of suits claiming that Am Law 200 firms played key roles in their clients’ financial scams, Ponzi schemes and fraudulent deals. Defendants include Willkie Farr & Gallagher; Morgan, Lewis & Bockius; and Burr & Forman, among others. Add to that pile Ashurst Perkins Coie, which was smacked with a complaint filed in Washington state court by trustees of the iCap Trust. The lawsuit alleges that Ashurst Perkins Coie was complicit in the squandering of $230 million from more than 1,800 investors in a Ponzi scheme. Ashurst
• “Also last month, Offit Kurman sued Actionstep, claiming the legal tech company failed to deliver promised systems integration of the law firm’s email, billing and document management. The suit seeks rescission of the contract, which allegedly included licenses for the company’s platform for $199,000 in the first year. Actionstep did not respond to a request for comment.”

“Private Equity Blocked From Buying Stakes in Tennessee Law Firms” —

• “Tennessee’s Supreme Court declined to allow private equity and other investors to directly buy stakes in the state’s law firms, while signaling openness to other regulatory changes related to the practice of law.”
• “The court in an Oct. 2 order said it will not change the state’s ban on non-lawyer ownership of law firms, maintaining widely observed US limitations on who can own and profit from legal services. The decision is a contrast to the minority of US states where law firms owned by non-lawyer investors, such as Arizona’s alternative business structures (ABSs), have their Supreme Courts’ blessing.”
• “‘At this time, the Court has not identified sufficient need or support for reforms related to non-lawyer ownership of law firms or fee-sharing with non-lawyers,’ the court said. ‘The Court may revisit this topic in the future as additional data regarding the success of these reforms becomes available.'”
• “Investors wanting to cash in on Tennessee law practices will need to employ the work-around of a management services organization. MSOs, businesses that run the administrative functions of law firms for a hefty fee, have gained favor in the investor community as a means for non-lawyers to share in the ownership and wealth of law firms without running afoul of the profession’s regulatory limitations.”
• “Other states such as Arizona and Utah have opened law firms to direct investment by modifying rules restricting ownership and profit of law practices to licensed attorneys. Interest in the Arizona program has cooled as the state tightened its requirements and investors turned their attention to MSO deals.”
• “‘I don’t see them as foreclosing non-lawyer ownership forever,’ Memphis-based Adams & Reese partner Lucian Pera said of the Tennessee court. ‘The court didn’t go down that road this time but it didn’t say this is antithetical to the core values of the profession. They just said we’re not doing this now.’ Pera advocated for the changes and helped draft Arizona’s changes to its law firm ownership rules.”

“Australian ban on new KPMG contracts still leaves room for $38.5M to flow to consulting firm” —

• “The federal government awarded KPMG AUD$38.5 million, even as the company is blocked from new federal government contracts after whistleblower allegations raised questions about its ethical soundness.”
• “KPMG has overhauled its Australian leadership, exited partners and announced nearly 390 job cuts as it grapples with the ongoing fallout from claims it misused confidential client information to win work. The Department of Finance in June told agencies to stop awarding work to the firm for callouts that closed between June 16 and Sept. 30 — later extended until Oct. 31 — as former senior public servant Ian Watt investigates the firm’s governance, culture, ethics and integrity frameworks.”
• “KPMG agreed to comply and has not bid for new work, but the terms of the freeze have still allowed six departments to send tens of millions of dollars to the firm — including through contracts that were finalized before it came into effect and amendments to existing arrangements.”