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When you hire outside counsel to handle an important litigation, you expect that your case will be tried by an experienced partner. But what if the firm decides that the best person for the job is a senior associate, who nevertheless loses the case? Has the firm committed malpractice? The Sheraton hotel chain thought so after it got hit by a multimillion-dollar verdict in a 1999 trial involving its Washington, D.C., hotel. Two years later the company filed suit against its outside counsel, LeBoeuf, Lamb, Greene & MacRae. Sheraton claimed that the firm was to blame for the trial loss because it put an inexperienced senior associate in charge of the case. A New York state judge ruled against Sheraton, saying there wasn’t enough evidence to determine whether LeBoeuf’s staffing decision had affected the outcome of the 1999 trial. But in September the hotel company finally won partial vindication, when a jury decided that LeBoeuf’s attorneys had committed malpractice because they had failed to raise a particular defense in the earlier trial. The case started four years ago with a dispute over a Sheraton facility in Washington, D.C. The hotel’s owners claimed that its manager, Sheraton, had failed to pass along rebates the company received through a volume purchasing program. A Delaware state court jury agreed and slammed Sheraton with a $50 million verdict, which was later reduced to $30 million, including $17 million in punitive damages. The company is currently appealing the verdict. (Part of ITT Corporation at the time, Sheraton is now owned by Starwood Hotels & Resorts Worldwide, Inc.) In its subsequent malpractice complaint, filed in New York state court in Manhattan, Sheraton blamed the loss on LeBoeuf. Partner John Kinzey, Jr., was supposed to be the lead lawyer in charge, according to Sheraton. When the case went to trial, however, LeBoeuf senior associate Scot Gleason took command. A Last-Minute Switch Sheraton claimed that Kinzey gave the case to Gleason just ten days before the trial started. According to court testimony, LeBoeuf had held several mock jury trials in which Kinzey appeared nervous, while Gleason was smooth. As a result, the firm appointed Gleason as the first chair. Sheraton argued that the associate’s inexperience led to several instances of malpractice at trial. But according to Stephen Fishbein, a Shearman & Sterling partner who represents LeBoeuf in the malpractice action, “Gleason was involved in litigating [the hotel] case for two years before the trial.” Fishbein adds that at the time, Gleason “had done numerous trials, including at least one jury trial.” Gleason left LeBoeuf in 2000 to work as a political consultant. New York state court judge Ira Gammerman deemed LeBoeuf’s staffing of the hotel suit irrelevant. But Sheraton fared better with the jury, which concluded this fall that LeBoeuf committed malpractice in the Delaware trial because it did not present a “reliance on the advice of counsel” defense. Sheraton agrees. The company says that in 1996 it was told by its outside counsel � LeBoeuf � that the volume purchasing program at the D.C. hotel was legal. Had LeBoeuf presented this information to the jurors in the Delaware trial, they wouldn’t have socked Sheraton for punitive damages, the company claims. It maintains that LeBoeuf is on the hook for the $17 million in punitive damages, plus more than $3 million in interest. Fishbein says it’s too early to tell whether LeBoeuf will have to fork over money to Sheraton, since the company may yet get the punitive damages award vacated on appeal. But whether LeBoeuf has to cough up or not, it has endured a law firm’s worst nightmare: a falling-out with a powerful client.

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