As of Friday, William Lerach will be the former scariest plaintiffs lawyer in America.
The lead partner at Lerach, Coughlin, Stoia, Geller, Rudman & Robbins announced Tuesday that he's stepping down from the firm he started in 2004, when he split off the West Coast offices of the firm now known as Milberg Weiss.
Reached on his cell phone Tuesday, Lerach said he's planning to take some time off.
"I feel like, you know, I've worked a lifetime worth of work, so I'm ready to travel, and do whatever I'm going to do," he said.
That could include going to such unconventional destinations as prison -- or at least the U.S. Attorney's Office.
People familiar with the seven-year federal criminal probe of Milberg Weiss -- which has already resulted in a guilty plea by former partner David Bershad -- said Lerach and L.A. federal prosecutors are nearing a plea deal relating to legally questionable payments Milberg Weiss made to its lead plaintiffs and a former expert witness.
A spokesman for the firm said that as of Friday, its name will change to Coughlin, Stoia, Geller, Rudman & Robbins.
On Tuesday, Lerach said he didn't feel that prosecutors were forcing him into retirement. But in an e-mail sent to members of the firm that was published on the Wall Street Journal Law Blog, he wrote, "I will be retiring in short order to resolve the investigation about alleged events at my former firm more than a decade ago."
And he fueled speculation about his future in the criminal case by writing that "despite my mistakes, I am immensely proud that together we built a firm without peer and never shied away from taking on the world's most powerful and corrupt corporations."
For more than two decades, Lerach has been despised by corporate executives, especially in Silicon Valley, for his aggressive approach to pursuing securities fraud class actions. For years, he was the subject of regular eviscerations in the business press. But pension funds and the Democratic Party -- for which he was a major fundraiser -- lauded him, as did many of his adversaries when it came to discussing his skills.
"I think he is an extraordinarily able lawyer with unique judgmental abilities, very solid business judgment, but also a great deal of energy and passion in what he did," said Norman Blears, a Heller Ehrman securities litigator who said he's faced off with Lerach more than 50 times.
Blears said Lerach "stood alone" atop the plaintiffs bar and will leave a big void. "There are a lot of very able plaintiff lawyers out there," said Blears. "I don't think there's anyone that's quite Bill Lerach."
CASE HISTORY
Lerach joined Milberg Weiss in 1976, and -- along with current Milberg chief Melvyn Weiss -- built it into the country's most powerful plaintiffs firm.
But in 1999, a Beverly Hills, Calif., ophthalmologist facing federal prison after an insurance fraud conviction offered up Lerach to L.A. federal prosecutors.
The doctor, Steven Cooperman, had served as lead plaintiff in several securities class actions, and in exchange for a more lenient sentence, he told the prosecutors that Milberg Weiss had paid him a portion of its attorney fees after it settled cases where he was lead plaintiff. Such a practice is legally questionable because it would give lead plaintiffs a divergent interest from the rest of the class -- and because it wasn't reported to the courts.
Cooperman's admission sparked a convoluted investigation that branched off multiple times. In the end, Cooperman proved too unreliable to provide the basis of an indictment. (Among other transgressions, he engaged in a health care fraud in which blind patients were asked to sign forms for surgeries that never occurred.) But the investigators moved on to other former clients.
Eventually, they indicted two Milberg Weiss name partners, Bershad and Steven Schulman, in the kickback scheme. Bershad entered his guilty plea earlier this year, and people briefed on the case said Schulman is discussing one, as is Weiss.
A message left for Managing Partner Patrick Coughlin was returned by a firm spokesman, who declined to comment on how much equity Lerach held in the firm, and how much he would receive from the other partners upon his departure. The spokesman also declined to say what Lerach may be owed in fees from the Enron litigation, which has yielded more than $7 billion in settlements.
