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It’s payback time for former Pillsbury Winthrop Shaw Pittman partners. Literally. At least eight lawyers who left Pillsbury last year are being asked to return a portion or all of their 2006 earnings to the firm within 30 days � but most say they have no intention of paying back anything, even if it means going to court. The attorneys received letters this month claiming they had been overpaid, demanding repayments of about $30,000 to $100,000. One letter, which has been read by The Recorder, explains that the ex-partner in question received a distribution greater than the actual share of the firm’s profits at the time of departure. Pillsbury has had a rocky recent past. Profits had been sluggish in recent years, though the firm recently posted improved revenue per lawyer and profits per partner for 2006 � helped partly by the departure of about 100 lawyers, about 40 of them partners. Reactions from ex-partners who received the letters ranged from “insulted” to “furious,” though none was willing to speak on the record. Many questioned the firm’s accounting, the fairness and enforceability of the demands, and why they are being singled out, since not all partners who left last year got a letter. Pillsbury responded to questions through a prepared statement by partner Ron Van Buskirk, the firm’s general counsel. “It is common for attorneys who leave a law firm to have repayment obligations for items the firm may have advanced in their behalf, such as draws against future income and other things,” Van Buskirk wrote. “The letters we sent were notices relating to such obligations.” The firm did not say how much money is at stake. “Sometimes the firm and the former lawyer may disagree on what’s owed, but that is a private matter to be addressed between the parties,” Van Buskirk wrote. “The firm respects that privacy and will not discuss such information publicly.” Several of the ex-partners said the firm may have to discuss the issue in a courtroom if it really wants the money. “It’s something that we’re going to fight and not take lying down,” said one former Pillsbury partner who spoke on the condition of anonymity. Former partners said that if the firm sues, they’ll band together in court. Some said they are looking to hire lawyers in the matter. It wouldn’t be the only time Pillsbury has had to meet former partners in front of a judge. The firm is already being sued by six former Shaw Pittman partners who left at the time of the 2005 merger between their firm and Pillsbury Winthrop, claiming the combined firm owes them millions in unreturned capital contributions and for work they did in the first quarter of 2005. Industry insiders and law firm leaders say that letters demanding repayment sent long after a partner’s departure are an unusual occurrence. “I have not seen this very often,” said Natasha Ciancutti, a legal recruiter with Major, Lindsey & Africa in San Francisco. “I haven’t heard of it,” agreed Peter Zeughauser of the Zeughauser Group in Newport Beach. “But it’s not unusual for financial affairs to be settled up at the time of the departure.” The letters to ex-partners note that the firm’s fiscal year closed at the end of December. The letters cite the partnership agreement in asking for money back. The letters say partners who leave are entitled to the lesser of two amounts: what they had been paid at the time of departure or the actual share of “distributable net profits for the portion of the year” the partner was there. Since most law firms don’t start turning a profit till later in the year � in part because of the slow turnaround on billings and large amount of expenses at the beginning of the year � there may not have been profits to share for partners who left before the end of the year, said Ed Poll, a Los Angeles law firm consultant with the LawBiz Management Company. “One of the things that happens with law firm accounting is that draws can be based on projections,” Poll said. “The distributions were probably made on what was expected and not what was.” Regardless of what happened, Poll cautioned that it can be very difficult to get the money back once it’s been given out. Not that the firm isn’t trying to make it easier. “For your convenience,” the certified letters note, “also enclosed is a prepaid, return-address envelope.”

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