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Coughlin Stoia Faring Well Without Co-Founder Lerach
San Diego firm sheds shadow of criminal probe, gets new business
The National Law Journal
February 26, 2008
Coughlin Stoia's Patrick Coughlin
When securities plaintiffs lawyer William S. Lerach struck a plea deal late last year in the government's kickback case against his former firm Milberg Weiss, he required that federal prosecutors steer clear of charging the firm he co-founded four years ago.
But Coughlin Stoia Geller Rudman & Robbins, as the firm is now known, doesn't need Lerach's help anymore.
In fact, the 175-lawyer firm, based in San Diego, has churned out more new cases on average than in the months before Lerach resigned on Aug. 31.
Earlier this month, Lerach was sentenced to two years in prison.
Now, Coughlin Stoia finds itself free from the shadow of the criminal investigation, said Patrick Coughlin, a name partner who, in many ways, has taken over Lerach's role at the firm. That means more opportunities for the firm's next generation of partners, including those in a new practice area: intellectual property litigation.
"The reality is our business has picked up," Coughlin said. "And it didn't have anything to do with having Bill here or gone. He's a significant player in the field. That said, the lawyers here and now are some of the top lawyers in the field and have the most trial experience handling litigation."
LAWSUITS SANS LERACH
Lerach, a former partner at Milberg Weiss, agreed to plead guilty soon after resigning from his firm. Federal prosecutors have alleged that Milberg Weiss and its partners received more than $250 million in attorney fees by paying illegal kickbacks to name plaintiffs in class action and shareholder lawsuits.
In the months since Lerach's departure, Coughlin has spent more time meeting with clients, mostly public pension funds and large individual shareholders.
So far, about two dozen new funds have retained the firm.
In some way, Lerach's departure has made life easier, he said.
"Yes, Bill was a household name and brought good and bad," Coughlin said. "But he's been in the press under that investigation for years. With all due respect, our competitors hammered us every time we walked in the door anywhere. That doesn't happen anymore."
One result is Kelly Jenkins, general counsel at the State Universities Retirement System of Illinois (SURS), retaining Coughlin Stoia in September for a five-year contract.
"It was something that we considered, whether he was going to be with the firm or not," Jenkins said of Lerach. "And once we knew he had left the law firm ... it became of no consequence to us."
Since Lerach's departure, Coughlin Stoia has filed an average of about 17 new cases per month during 2007, up from about 15 new cases per month earlier in the year, according to docket records.
Still, the filings are down from 2006. Coughlin said a general slump in securities cases, rather than Lerach's imminent departure, caused the slowdown, which has picked up with stock-options backdating cases.
In 2008, the recent subprime mortgage disaster also could fuel substantial litigation.
THE NEXT GENERATION
Lerach's departure has opened doors for other partners at the firm.
"Literally, Bill would suck all the air out of the room," Coughlin said. "He was so visible that you weren't going to reach out to a number of people in the firm. That's naturally changing."
Among the senior partners regularly handling cases are Darren Robbins, Paul Geller and Samuel Rudman, as well as Randi Bandman, Michael Dowd and Sanford Svetcov, he said.
Other partners now manage settlements -- traditionally, a role reserved for Lerach, Coughlin said.
The firm also added an intellectual property litigation group earlier this month with two partners from Philadelphia-based Duane Morris, John Herman and Ryan K. Walsh, who opened Coughlin Stoia's Atlanta office.
Herman said he was attracted to Coughlin's focus on plaintiffs and contingency fee cases. "What we saw really was a very healthy business," he said.
Herman said he plans to expand the office to about two dozen attorneys in the next few years.
