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NEW YORK — A Manhattan lawyer who sits on the committee that polices the legal profession has been hit with a malpractice suit claiming that he padded his bills and frequently surfed dating and gambling Web sites during an 18-month period in which he billed his client more than $3 million. New York-based hedge fund Parametric Capital Management and its chief executive, Erik Postnieks, filed suit yesterday in Manhattan Supreme Court against litigator Michael Lacher, his seven-lawyer firm Lacher & Lovell-Taylor, and John Olmstead, of counsel at the firm. The suit charges the defendants committed fraud, malpractice, breach of contract and breach of duty by submitting exorbitant bills with little or no documentation. The complaint also claims the defendants threatened to abandon Parametric in the middle of the case if their bills were not paid, and then carried out their threat and withdrew from the ongoing arbitration in June. Parametric is seeking $3.7 million in compensatory damages and $10 million in punitive damages. “My client was very poorly served by a member of my profession to whom duty came well after other aims and interests,” Parametric’s lawyer, Thomas Engel of Engel & McCarney, said yesterday. Lacher yesterday called the lawsuit a “complete fabrication” and said he and his firm had valid professional reasons for withdrawing from the case, relating to differences over case strategy, not fees. He said he believed Postnieks was lashing out because he felt threatened by the pending arbitration. “It’s sad and unusual for a client to go on the attack like this,” he said. “In my view, it’s designed to evade the time and scheduling constraints of the arbitration.” Lacher is a member of the Departmental Disciplinary Committee for the First Judicial Department. As a committee member, he sits on panels that recommend punishment for attorneys accused of violating the code of professional responsibility. There are 47 such committee members. Olmstead declined to comment on the matter. According to the suit, Lacher and Olmstead were retained by Postnieks in November 2001 to represent him in an arbitration adverse to the wealthy Berner family, represented by Roger Podesta of Debevoise & Plimpton. Sources familiar with the matter said the parties were engaged in a dispute over the terms of investment management contracts by which the Berners had engaged Postnieks to invest some of their money. Thereafter, Lacher and Olmstead engaged in a scheme “to bilk plaintiffs of millions of dollars under the guise of rendering bills for legal services which they never intended to provide,” the complaint alleges. Lacher allegedly required Postnieks and Parametric to make some of their office space at 485 Madison Ave. available for his use. Parametric provided enough office space and equipment for eight people, and seven staff members of Lacher & Lovell-Taylor ultimately used Parametric’s offices. There, the suit charges, they spent most of their time making personal phone calls and surfing the Web. “A review of the records relating to the work stations reveals daily and at times virtually non-stop visitation to websites obviously of a personal nature and unrelated to the representation,” the complaint states. The suit alleges that Lacher himself visited dating site nerve.com, gambling site pokerroom.com, entertainment site goldenoldies.com and a Bob Dylan chatroom at discussions.bobdylan.com. Other Lacher staff visited dating services at edge.ru4.com and jcupid.com, as well as sites such as cigaraficianado.com and nationalenquirer.com. Parametric claims its records show the Lacher team visited about 1,351 Internet sites in the 12 months ending in June, only 14 of which were legal research sites like Westlaw. The Lacher lawyers allegedly billed well over $100,000 a month for most of 2002, and began billing over $200,000 in the fall. From December 2001 to May 2003, the Lacher firm billed Parametric $3.1 million, the lawsuit states. Olmstead, despite being of counsel at the Lacher firm, separately billed Parametric $531,461 for the same 18-month period. Parametric claims that Lacher provided the barest narrative for most of these bills. When pressed, he allegedly submitted vague and suspicious time records that stated, for instance, “8.00 hrs-coding” or “7.00 hrs-review transcripts.” Further pressed, Lacher allegedly stated on different occasions that his bookkeeper had missed work to take care of her sick husband, and that the firm had lost the floppy disk on which backup billing data was stored. Lacher allegedly also became furious when Postnieks asked another lawyer to review the bills, and insisted it was common practice for litigators’ bills to be paid on receipt. Matters allegedly came to a head earlier in the year when Parametric claims Lacher ignored instructions to keep his bills under $100,000 a month. When Postnieks expressed concern about bills in April and May, Lacher allegedly threatened to quit the case and stated he needed the money to pay taxes. Olmstead also allegedly confronted the plaintiffs, telling Postnieks he would lose the arbitration if Lacher quit. Postnieks claims he bowed to pressure and paid most of these bills. Lacher yesterday disputed virtually all of Parametric’s allegations and called the charges that he surfed dating and gambling sites “absurd” and “laughable.” He also said it was at Postnieks’ instruction that he and his staff worked in the Parametric offices and that Postnieks’ financial staff pored over and approved every bill. Relationships were cordial and professional until fairly recently, Lacher said, and his staff was working extremely hard. “When all the facts come out, I expect we will be fully vindicated,” he said. Lacher withdrew from representing Parametric on June 5, a day after submitting a $184,565 bill, which incorporated the earlier unpaid $43,000 balance. The arbitration panel subsequently called all parties to appear June 9 and questioned Postnieks and Lacher separately. The suit alleges that Lacher refused to answer the panel’s questions concerning his withdrawal, and became embroiled in a shouting match with one of the panel members, former Manhattan Supreme Court Justice Walter Schackman. Engel has taken over representation of Parametric and Postnieks in the arbitration. He said yesterday he would be seeking additional time in the matter. The suit also alleges that Lacher and his firm have not cooperated with the transition to new counsel by turning over documents and files. Lacher said he has fully cooperated with the transition. Lacher is no stranger to litigation in which he is a party. In 1993, he was sued for more than $620,000 by the now-defunct law firm Summit Rovine & Feldesman, which claimed it had overpaid him while he was of counsel at that firm. The suit was dismissed by a Manhattan Supreme Court. For much of the same time as he was representing Parametric and Postnieks, Lacher was engaged in a bitter dispute with a Paris-based law firm with which he had sought to merge his own firm. Though the merger fell apart by the beginning of 2001, Lacher and the firm Sokolow, Dunaud, Mercadier & Carreras continued to share the same office space and sued each other over its possession. A June 2001 referee’s report detailed a vitriolic atmosphere in which lawyers held tug-of-wars over spare furniture, engaged in acts of petty vandalism and threatened each other with physical violence. The case settled in February, and Lacher has moved to new offices. Anthony Lin is a reporter for the New York Law Journal , a Recorder affiliate.

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