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Any law firm can poach partners from an imploding rival, but it takes extra talent to get a competitor’s consent to loot its talent trove. Ask Lieff Cabraser Heimann & Bernstein. The San Francisco plaintiff firm is negotiating with Milberg Weiss Bershad & Schulman to take on a group of the New York firm’s partners. The move would make Lieff Cabraser a force in the cutthroat securities bar. It would give Milberg Weiss some control over its ongoing exodus of partners and perhaps allow it to share in the revenue of those partners’ cases. The firm has been staggering since last month’s federal indictment, which accused Milberg Weiss and two of its name partners of paying kickbacks to lead plaintiffs in securities class actions. Several sources familiar with the talks said they’re being conducted at the highest levels of both firms and have been transpiring for weeks. Negotiations are unlikely to wrap up before mid-July, they added.
Complete coverage of the Milberg-Weiss investigation

Lieff Cabraser Managing Partner Robert Lieff wouldn’t comment Tuesday when asked about the talks, and Milberg lead partner Melvyn Weiss forwarded a message to a spokeswoman who didn’t respond to questions about the firms’ discussions. Experts in the class action bar said such a deal could give Lieff Cabraser a client base that would let it compete with the country’s top securities firms. “Lieff Cabraser is one of the highest-quality firms in the country, and possibly the highest in the plaintiff bar,” said John Coffee, a professor at Columbia Law School. But, he added, the firm has focused more on mass torts and employment class actions than on securities cases, and hasn’t built up the base of large institutional investors that have kept firms like Milberg major players in stock fraud suits. “You have to have a relationship these days with a large group of institutional investors who are willing to serve as lead plaintiffs,” Coffee said. The few firms that have matched Milberg’s success in developing such a client base have done so through active marketing to institutional clients. “They sponsor conventions each year and invite pension managers to Manhattan,” Coffee said. “That’s marketing,” something that Lieff Cabraser has not focused on, he said. Nonetheless, the firm is still known for having some of the better securities lawyers in the West. “They’re very good,” said Melvin Goldman, a partner at Morrison & Foerster in San Francisco who defends companies in securities class actions, and who has gone up against both plaintiff firms several times. Despite the indictment � which has already cost Milberg several high-profile clients � Goldman said he doesn’t think Lieff Cabraser’s reputation would suffer a hit if it took on Milberg lawyers. “I don’t think anyone who works there is particularly tainted by working there,” he said. Rather, it’s the firm itself that’s got the taint. And by vacating the firm, Milberg partners would have an easier time keeping clients made skittish by the federal charges. “Maybe you can move half the firm to another large firm and keep it alive in substance,” Coffee said. “This is something both firms could use to their advantage.”

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