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Conde Nast Portfolio


The Rebuttal

July 21, 2008

By Walter Olson

Bill Lerach claims that plaintiffs and competitive law firms were not harmed by his firm's kickbacks. This is wrong on both counts. In fact, law firms like his faced a temptation to charge clients excessive fees but were kept in check by the named plaintiffs. Lerach's kickbacks were calculated to ensure that this backstop didn't work. A new study by a professor at the St. John's University's law school suggests that Lerach's kickback-tainted cases in fact resulted in higher fees—but not higher recoveries—than other cases.

Through artful wording, Lerach also suggests that kickbacks are somehow the only way to compensate clients for their trouble and that they were acceptable until recent maneuvers by big-business interests stomped them out. Lerach knows well that state courts allow payments to plaintiffs at the end of lawsuits, when such payments are legitimate.

It was because all the relevant legal players considered his sort of payments improper that Lerach needed such an elaborate scheme to cover them up by suborning perjury and making false statements to judges. Lerach's apologia is oddly lacking in remorse about the role those elaborate lies played in undercutting public confidence in a system that made him so rich.

Class actions continue to thrive. Now there is hope that the ­lawyers who pursue them will meet a higher ethical standard than Lerach did.

Original Source:



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