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Milberg counsel responds Professor John C. Coffee Jr.’s article, “ Milberg Weiss Indictment” [NLJ, June 19], misstates the facts and draws unfair and unwarranted conclusions. Professor Coffee faults Milberg Weiss Bershad & Schulman for refusing to waive its attorney-client and work-product privileges to reach a nonprosecution agreement with the government. He then speculates, incorrectly, that the reason for this refusal was the desire of the two indicted partners to avoid a waiver that might “make their defense untenable.” In his view, apparently, assertion of privileges connotes guilt. That is law and order rubbish, and he knows better. First, the decision not to waive privileges was made by the firm’s management committee, which at the time did not include the two indicted partners (who were on leave) and did include seven other partners and Melvyn Weiss. Second, he ignores the bedrock legal principle at stake in the firm’s refusal to waive its privileges. On this issue, Milberg Weiss has been supported by the U.S. Chamber of Commerce and the Wall Street Journal, no friends of the firm. The American Bar Association also has announced its strong opposition to seeking such waivers, and Congress is about to hold hearings on the issue. Declining to waive the privilege, therefore, is hardly an improper matter of self-interest. Rather, it is a laudable affirmation of a fundamental tenet of our legal system. Professor Coffee ignores that the indictment of an entire law firm based solely upon the alleged conduct of a handful of partners, of which all others were unaware, is unprecedented. He also ignores that the overwhelming majority of those partners upon whom the consequences of an indictment will fall are, by the government’s own reckoning, entirely innocent. As even he concedes, “professional services firms-law or accounting-are fragile. Both clients and then partners may flee to competitors if the firm becomes stigmatized. Already, this process has begun at Milberg.” He also fails to address whether it is fair for the government to inflict this harm upon hundreds of innocent people, waivers or not, simply because it can. Professor Coffee further asks why Milberg Weiss could not simply have asked repeat clients if it could contact them directly, rather than continuing to pay referral fees to their lawyers. He misunderstands that in the professional world, one cannot undercut referrers in this fashion. Referrals are the life-blood of plaintiffs’ law firms. Any firm that depends on referrals will be unable to attract new referrals if it acquires a reputation for “stealing” clients from referring counsel. Referring lawyers will refer clients to firms that pay referral fees. They cannot be expected to continue to refer clients to a firm that stops doing so. Professor Coffee notes Harry Lewis and William Weinberger, who each appeared, almost always as the client of a law firm other than Milberg Weiss, “as the named plaintiff in at least 500 or more cases,” such that the Delaware Chancery Court once joked about them. First, this demonstrates that “repeat plaintiffs” are a fact of life in the plaintiffs’ bar of which everyone, including lawyers for defendants, is aware. Second, repeat plaintiffs are more than just a fact of life. They are good for the system. This was recognized earlier this year by the 7th U.S. Circuit Court of Appeals. Writing for a unanimous panel in Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir. 2006), Judge Frank Easterbrook categorically rejected the notion that such “professional” plaintiffs are problematic: “What the district judge did not explain . . . is why ‘professional’ is a dirty word. It implies experience, if not expertise. The district judge did not cite a single decision supporting the proposition that someone whose rights have been violated by 50 different persons may sue only a subset of the offenders. Neither does GMACM.” Id. at 954. And neither, with all due respect, does Professor Coffee. Professor Coffee concludes that “the plaintiffs’ bar would be well advised to respond proactively and develop its own code of best practices.” What he fails to say is that Milberg Weiss implemented such practices months before the indictment. For example, the firm adopted strict procedures to ensure that no portion of any future referral fee paid by the firm is shared by any plaintiff. These measures are enforced by an independent monitor, Bart Schwartz, a highly respected former chief of the criminal division of the U.S. Attorney’s Office for the Southern District of New York. When Milberg Weiss offered to cooperate with the government to further strengthen these procedures, the government failed to suggest any improvements. Going one step further, Milberg Weiss offered to assist the government in lobbying for the adoption of these changes throughout the class action plaintiffs’ bar. By choosing instead to indict the firm, without regard for the impact on the hundreds of innocent lawyers and employees, the government lost the opportunity to enlist the help of this powerful ally. William W. Taylor III Washington The writer, a partner at Zuckerman Spaeder, is lead counsel to Milberg Weiss Bershad & Schulman.

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