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Funny what an indictment can do. A week after L.A. federal prosecutors charged Milberg Weiss Bershad & Schulman with paying illegal kickbacks to name plaintiffs, top partners at the firm are rushing out the door. “What’d the government think would happen?” said Melvyn Weiss, the firm’s lead partner. While he remains unindicted, the charges against his firm and two top partners are making Milberg Weiss’ future look increasingly bleak. In recent days, at least one member of the firm’s executive committee and two members of the firm’s management committee have announced their departures, along with a handful of other lawyers. And partners at competing class action plaintiff firms say they’re being bombarded with phone calls and resumes of Milberg lawyers seeking jobs at firms without criminal exposure � and without the baggage that criminal charges create for plaintiff lawyers seeking large, institutional clients. On Thursday, Joe Whatley Jr., head of the Alabama plaintiff firm Whatley Drake, got his New York bar card. And on Friday, he confirmed that in coming months he’ll be opening a New York office with current Milberg Weiss partner Deborah Clark-Weintraub and the entirety of Milberg’s health-care practice group � which is led by Whatley’s wife, Edith Kallas. “This is something that’s not bitter with Milberg,” Whatley said. “She’s representing medical societies and people like that, and she wanted to make sure she could deal with them and continue to represent them.” In addition to Kallas, the health-care group � which comes with a handbag of high-profile cases, such as litigation against brokerage firm Marsh & McLennan � will bring another Milberg partner, Joseph Guglielmo, six current Milberg associates and one Milberg staff lawyer to Whatley Drake. The group’s work with his firm, Whatley said, will continue to focus on “health care and insurance. You also have the brokerage cases, which is only partially health care.” The departures of Kallas, a member of Milberg’s executive committee, and Clark-Weintraub, who sits on the management committee, were compounded this week by at least one more senior partner’s departure. Arnold Bressler, who heads the firm’s corporate practice and sits on the management committee, is also leaving the firm. While Bressler could not be reached by press time Friday, his wife confirmed his departure from the firm. “He really does not have any plans at this point,” she said.
Complete coverage of the Milberg-Weiss investigation

The departing partners follow Salvatore Graziano, another partner, who in March left the firm for competitor Bernstein Litowitz Berger & Grossmann. Lawyers inside and outside Milberg said another partner, Seth Rigrodsky � the head of Milberg’s Delaware office � has recently been engaged in discussions about leaving the firm. Rigrodsky did not return messages left at his office and his home, and another partner reportedly leaving the firm refused to comment. As it became clear over the last few years that the L.A. U.S. attorney’s office was deepening its investigation of several Milberg partners � including William Lerach, the former top rainmaker who split off to form his own firm in 2004 � there was widespread speculation that the firm would be able to escape indictment. Since bringing down the accounting firm Arthur Andersen with a 2002 conviction that was eventually thrown out by the U.S. Supreme Court, the Justice Department and right-wing stalwarts inside and outside the federal government have professed a reticence to indict entire firms. Indeed, the Wall Street Journal editorial page last week decried the Milberg indictment for going after the entire firm. But prosecutors and lawyers for the firm failed to agree on a nonprosecution agreement earlier this month, largely because prosecutors wanted Milberg to grant the government extensive access in its ongoing probe, which, sources close to the case say, is now focused on Weiss and Lerach. So the firm, along with name partners David Bershad and Steven Schulman, was indicted � something that Weiss said Friday was a surprise. “I believe it’s stunning and shocking, but we’ll leave that for another day,” he said. Another Milberg Weiss lawyer said that even with the ongoing departures, he believes the firm isn’t necessarily slouching toward its demise. “If we’re acquitted, we can continue,” he said. “If we’re convicted, it’s much harder.”

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