Around the Firms

Ex-Partners Sue Townsend for Cut of Fees

Two former equity partners are dueling with Townsend and Townsend and Crew over whether they should get a cut of the firm's bounty from an antitrust class action against Microsoft Corp.

In late April, Duane Mathiowetz and K.T. “Sunny” Cherian sued their old firm for breach of contract, each seeking at least $700,000 in damages.

Among other things, they assert they're entitled to a pro-rated cut for contingency cases the firm was working on before the pair left for Howrey Simon Arnold & White 2 years ago.

Though their complaint in San Francisco Superior Court doesn't refer to any particular litigation, the Microsoft case is at least one point of contention.

Townsend Chairman James Gilliland Jr. says his firm expects to collect $30 million to $32 million in fees for its role as lead class counsel in an antitrust class action against the software giant.

“That, I suspect, is what this is really about,” Gilliland says.

Cherian confirmed that the recovery in the Microsoft case is one issue, but declined to elaborate further on the suit. Mathiowetz did not return calls seeking comment.

The settlement in the 27 coordinated actions ' Microsoft I-V cases, 4106 ' was announced about 3 months before the partners left the firm in 2003.

It was more than a year later that a San Francisco Superior Court judge formally approved the settlement, then awarded $101 million in fees to be split among more than 30 firms. Townsend estimates it will collect about a third of the money, though some firms are still squabbling over how to divvy up the fees.

The crux of the former partners' dispute is a disagreement over how Townsend has interpreted its partnership agreement in the past.

The firm maintains that the date that it actually gets the money in hand determines who reaps the benefits.

Under longstanding policy, Gilliland says, the firm's equity partners ' there are about 50 now ' all get a cut of any contingency fee paid while they're at the firm.

But those who leave to practice law somewhere else don't get to reap the benefits of contingency fees the firm receives later, he says.

“If a partner leaves the firm, and remains active in the practice of law, [he] does not retain any interest in ongoing contingency cases.” Gilliland says. The firm has never split such fees with former equity partners practicing elsewhere. “To the extent there have been any contingency recoveries since they left the firm, and more particularly with regard to this Microsoft fee, they are not entitled to receive any.”

Mathiowetz and Cherian have a completely different take on the partnership agreement. According to their suit, the firm's “practical interpretation” of that contract has previously been that equity partners are entitled to a pro rata share of contingency fees, based on their compensation during the years the firm pursued the cases.

It didn't matter “whether those equity partners continued with the firm or had withdrawn from it,” says the complaint by David Zeff, of San Francisco's Law Offices of David M. Zeff.

Mathiowetz and Cherian also allege in Mathiowetz v. Townsend and Townsend and Crew, 440446, that the firm hasn't paid them what they're owed for their interests in the partnership. They're asking the court to appoint an appraiser to set an appropriate “buyout price.”

Gilliland says his firm has paid the two former partners all the capital they're due under their partnership agreement. He declined to name a dollar figure.

“It was all they were owed.”

Partners at one of Southern California's most successful plaintiff shops have embarked on a novel business plan: They're opening Bay Area offices for a firm whose reputation is staked on one man. And they don't seem to mind that he died last month.

“Johnnie Cochran is established in the public mind. He became almost an icon or a cultural standard of exquisite legal practice, criminal and civil,” says Bruce Fishelman, of counsel at Santa Monica, CA's Greene Broillet & Wheeler, and the new western manager for the 130-lawyer Cochran Firm, whose name partner died March 29.

“Greene Broillet has got a great reputation, but it's not known the way Cochran is known,” Fishelman says, explaining why Greene Broillet's nine partners ' plus three who left that firm in April ' have become partners in the Cochran Firm.

“I've never heard of anything like this,” says David Wilkins, a professor at Harvard Law School and expert on law firm structure.

The arrangement promises increased West Coast firepower for the Cochran Firm and, Fishelman said, an opportunity for the new partners to work on a wide range of mass tort, civil rights and public interest suits.

But academics and legal ethicists say the Cochran Firm's fast growth and seemingly loose alliance of lawyers create issues that few – if any – plaintiff firms have had to tackle.

Famous in life for the O.J. Simpson defense, police brutality suits and impressive cultural penetration, Cochran in death is fast becoming a legal Colonel Sanders as his image presides over an increasing number of offices around the country.

“It's like a franchise, as I understand it,” Wilkins says. “It's a little bit like he licensed his name.”

The Cochran Firm ' which is separate from the Los Angeles Law Offices of Johnnie Cochran ' has ballooned over the past 8 years by snapping up established lawyers around the country.

“We try to identify the best lawyers in the state if we are interested in expanding,” says J. Keith Givens, the firm's Alabama-based nationwide managing partner. Most of these lawyers, he says, including the Greene Broillet partners, were handpicked by Cochran himself.

Givens said the majority of partners are required to leave their prior firms, but an exception was made for the Greene Broillet lawyers.

Jennifer Stanich-Banmiller, president of the Danville-based plaintiff marketing company Wingtip Communications, is skeptical of the practice of using a dead lawyer to advertise the services of live lawyers in Los Angeles who delegate the work to other lawyers. She said it seemed to be purely an advertising scheme.

“I can only imagine that there are franchising opportunities in the future,” she says.

Wilkins, the Harvard professor, says the Cochran Firm has become a curiosity in the heavily localized plaintiff bar.

“It doesn't look from the outside to be a traditional law firm. It looks like a collection of fairly independent firms that were brought into a loose affiliation.”

Fishelman says he expects this affiliation to help the Greene Broillet partners expand the range of cases they bring. But ethicists caution that as firms grow – and lawyers share affiliations between firms – conflicts become increasingly common. “If I was the king of lawyers, there'd be no firm bigger than 25 partners,” says Richard Zitrin, an ethics expert and partner at Zitrin & Mastromonaco.

But Wilkins and Zitrin pointed out that the Cochran Firm's growth is exceptional only because it represents plaintiffs.

“I don't see why plaintiffs can't do what defense firms do,” Zitrin says.

Ex-Partners Sue Townsend for Cut of Fees

Two former equity partners are dueling with Townsend and Townsend and Crew over whether they should get a cut of the firm's bounty from an antitrust class action against Microsoft Corp.

In late April, Duane Mathiowetz and K.T. “Sunny” Cherian sued their old firm for breach of contract, each seeking at least $700,000 in damages.

Among other things, they assert they're entitled to a pro-rated cut for contingency cases the firm was working on before the pair left for Howrey Simon Arnold & White 2 years ago.

Though their complaint in San Francisco Superior Court doesn't refer to any particular litigation, the Microsoft case is at least one point of contention.

Townsend Chairman James Gilliland Jr. says his firm expects to collect $30 million to $32 million in fees for its role as lead class counsel in an antitrust class action against the software giant.

“That, I suspect, is what this is really about,” Gilliland says.

Cherian confirmed that the recovery in the Microsoft case is one issue, but declined to elaborate further on the suit. Mathiowetz did not return calls seeking comment.

The settlement in the 27 coordinated actions ' Microsoft I-V cases, 4106 ' was announced about 3 months before the partners left the firm in 2003.

It was more than a year later that a San Francisco Superior Court judge formally approved the settlement, then awarded $101 million in fees to be split among more than 30 firms. Townsend estimates it will collect about a third of the money, though some firms are still squabbling over how to divvy up the fees.

The crux of the former partners' dispute is a disagreement over how Townsend has interpreted its partnership agreement in the past.

The firm maintains that the date that it actually gets the money in hand determines who reaps the benefits.

Under longstanding policy, Gilliland says, the firm's equity partners ' there are about 50 now ' all get a cut of any contingency fee paid while they're at the firm.

But those who leave to practice law somewhere else don't get to reap the benefits of contingency fees the firm receives later, he says.

“If a partner leaves the firm, and remains active in the practice of law, [he] does not retain any interest in ongoing contingency cases.” Gilliland says. The firm has never split such fees with former equity partners practicing elsewhere. “To the extent there have been any contingency recoveries since they left the firm, and more particularly with regard to this Microsoft fee, they are not entitled to receive any.”

Mathiowetz and Cherian have a completely different take on the partnership agreement. According to their suit, the firm's “practical interpretation” of that contract has previously been that equity partners are entitled to a pro rata share of contingency fees, based on their compensation during the years the firm pursued the cases.

It didn't matter “whether those equity partners continued with the firm or had withdrawn from it,” says the complaint by David Zeff, of San Francisco's Law Offices of David M. Zeff.

Mathiowetz and Cherian also allege in Mathiowetz v. Townsend and Townsend and Crew, 440446, that the firm hasn't paid them what they're owed for their interests in the partnership. They're asking the court to appoint an appraiser to set an appropriate “buyout price.”

Gilliland says his firm has paid the two former partners all the capital they're due under their partnership agreement. He declined to name a dollar figure.

“It was all they were owed.”

Partners at one of Southern California's most successful plaintiff shops have embarked on a novel business plan: They're opening Bay Area offices for a firm whose reputation is staked on one man. And they don't seem to mind that he died last month.

“Johnnie Cochran is established in the public mind. He became almost an icon or a cultural standard of exquisite legal practice, criminal and civil,” says Bruce Fishelman, of counsel at Santa Monica, CA's Greene Broillet & Wheeler, and the new western manager for the 130-lawyer Cochran Firm, whose name partner died March 29.

“Greene Broillet has got a great reputation, but it's not known the way Cochran is known,” Fishelman says, explaining why Greene Broillet's nine partners ' plus three who left that firm in April ' have become partners in the Cochran Firm.

“I've never heard of anything like this,” says David Wilkins, a professor at Harvard Law School and expert on law firm structure.

The arrangement promises increased West Coast firepower for the Cochran Firm and, Fishelman said, an opportunity for the new partners to work on a wide range of mass tort, civil rights and public interest suits.

But academics and legal ethicists say the Cochran Firm's fast growth and seemingly loose alliance of lawyers create issues that few – if any – plaintiff firms have had to tackle.

Famous in life for the O.J. Simpson defense, police brutality suits and impressive cultural penetration, Cochran in death is fast becoming a legal Colonel Sanders as his image presides over an increasing number of offices around the country.

“It's like a franchise, as I understand it,” Wilkins says. “It's a little bit like he licensed his name.”

The Cochran Firm ' which is separate from the Los Angeles Law Offices of Johnnie Cochran ' has ballooned over the past 8 years by snapping up established lawyers around the country.

“We try to identify the best lawyers in the state if we are interested in expanding,” says J. Keith Givens, the firm's Alabama-based nationwide managing partner. Most of these lawyers, he says, including the Greene Broillet partners, were handpicked by Cochran himself.

Givens said the majority of partners are required to leave their prior firms, but an exception was made for the Greene Broillet lawyers.

Jennifer Stanich-Banmiller, president of the Danville-based plaintiff marketing company Wingtip Communications, is skeptical of the practice of using a dead lawyer to advertise the services of live lawyers in Los Angeles who delegate the work to other lawyers. She said it seemed to be purely an advertising scheme.

“I can only imagine that there are franchising opportunities in the future,” she says.

Wilkins, the Harvard professor, says the Cochran Firm has become a curiosity in the heavily localized plaintiff bar.

“It doesn't look from the outside to be a traditional law firm. It looks like a collection of fairly independent firms that were brought into a loose affiliation.”

Fishelman says he expects this affiliation to help the Greene Broillet partners expand the range of cases they bring. But ethicists caution that as firms grow – and lawyers share affiliations between firms – conflicts become increasingly common. “If I was the king of lawyers, there'd be no firm bigger than 25 partners,” says Richard Zitrin, an ethics expert and partner at Zitrin & Mastromonaco.

But Wilkins and Zitrin pointed out that the Cochran Firm's growth is exceptional only because it represents plaintiffs.

“I don't see why plaintiffs can't do what defense firms do,” Zitrin says.