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Lawyers, Ethics and Karma, Oh My

By Phil | July 13, 2007

I don’t pretend to be a saint (I couldn’t pull it off, in any event) but as I’ve gotten older, I’ve worked hard to be more tolerant of my fellow man. With one or two notable exceptions (I won’t tell), I try hard not to wish anyone ill. So it is with no great pride that I admit to not even trying to suppress a smile when I read in the July 10 New York Times that a prominent plaintiff’s class action lawyer, David Bershad, pled guilty to conspiracy to provide illegal kickbacks to class action plaintiffs.

Let me explain what this is about. America’s legal system allows lawsuits – called class action suits – to be brought on behalf of a large numbers of plaintiffs where the individual claims would be too small to make it worthwhile for individual plaintiffs to bring their own suits. So, for example, if you paid $2 more than you should have for tube of toothpaste because the toothpaste companies conspired to raise prices, you’re not likely to sue the bastards yourself – why bother. But you can be a member of a class of plaintiffs, represented by one or more lawyers who are supposed to represent your interests. You don’t have to pay the lawyers, but you do get to share in whatever is recovered, or so the story goes.

Here’s where it gets interesting (to me, at least, but then, I’m a lawyer…). Lawyers can’t just bring a class action case on behalf of a class. They must actually have a client (referred to as the “named plaintiff”) who was injured by the activity that allegedly injured similarly situated class members. Just like the rest of his “classmates” this named plaintiff doesn’t have to pay his lawyers. But the rules provide that the named plaintiff’s interests must not diverge from those of the rest of the class, meaning that he or she cannot recover any more than his individual fellow class members receive as a result of the lawsuit. Seems fair, right?

If, for example, the named plaintiff (let’s call him “Cooperman”) knew he was going to receive a healthy share of the millions of dollars that plaintiff class action attorneys (let’s call them “Bershads”) typically recover as attorney’s fees, he might not be likely to reject a proposed settlement whereby his fellow class members receive a coupon for their next toothpaste purchase. But he would almost certainly feel differently if all he got was an identical coupon. Thus it is for good and valid reasons that named plaintiffs – whose role is to represent the interests of similarly situated class members – must, by law, be well and truly similarly situated.

So guess what? Are you sitting down?? It turns out – you’re never gonna believe this – it turns out that at least one “Bershad” was involved in a conspiracy to pay at least one “Cooperman” huge sums of money to be a named plaintiff in class action lawsuits (in a 20-count indictment, prosecutors have claimed that Bershad’s law firm paid $11 million to named plaintiffs in more than 150 class-action lawsuits over the years. Personally, each of those numbers sounds low to me.)

Why would this news make me smile? Well, I used to be a defense lawyer, and I spent the first 15 years of my professional career defending companies against cases brought by the likes of David Bershad (and by Bershad himself). I’m not a knee-jerk defender of corporate America, but what I learned and saw during that 15 years was, shall we say, eye opening, and knocked my idealism down a notch or two.

I never doubted for a minute that the named plaintiffs – whose depositions I occasionally took – were lying to me when I asked them, under oath, if they were being compensated for their role as named plaintiffs. And I never doubted for a minute that their lawyers – the Bershads and their ilk – were behind the scam, and permitted the perjury to take place without blinking an eye. And I never doubted that these plaintiffs and their lawyers were laughing themselves to the bank while pretending to negotiate hard for settlements that provided little if any value to their clients – the true class members – but rewarded themselves with astronomical attorneys fees.

I have no doubt that many class action cases have merit. Indeed, I have good friends who are plaintiffs’ class action lawyers (though, as they say, I wouldn’t want my sister to marry one…). But it was a very poorly guarded secret that, as often as not, my clients were being shaken down by unscrupulous charlatans who were gaming a system that was originally and legitimately designed to help the little guy.

So I did not stifle my smile at Mr. Bershad’s ignominious fall. Nor did I do so when I read, the next morning, that Mr. Cooperman had similarly pled guilty for being Mr. Bershad’s dance partner. (I note for its amusement value the fact that Bershad’s law firm – Milberg, Weiss & Bershad – shed the “Bershad” from its name following its partner’s guilty plea. The firm was, no doubt, shocked – shocked that such shenanigans were going on under its nose. Stay tuned – that shoe will soon drop as well.)

I should be saddened by this turn of events – every story about unethical lawyers feeds a stereotype about the species that I believe is profoundly misguided and wrong. But I don’t believe that lawyers are above the law, or above ethical norms, or above fundamental notions of decency and integrity. To the contrary, rather than being above these principles, true lawyers should serve as their foundation. The rule of law is what holds civilized nations together. Its absence is what tears civilized nations apart. And lawyers are – first and foremost – guardians of the rule of law.

People love to quote Shakespeare’s line to the effect that “the first thing we should do is kill all the lawyers.” Gets a laugh every time. But these same people forget that the character uttering that line was a despot seeking to rid himself of those he believed to be his only true obstacle.

So no, let’s not kill all the lawyers. But let’s put the bad ones away for a very long time.

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