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LOS ANGELES � The unexpected announcement that high-profile plaintiffs’ lawyer William Lerach is retiring followed several months during which lawyers at his San Diego law firm have been sending out their r�sum�s or departing for competing firms. The surprise admission about Lerach, founding partner of Lerach Coughlin Stoia Geller Rudman & Robbins, came after federal prosecutors met late last month with lawyers representing his former firm, now called Milberg Weiss & Bershad, and one of its name partners, David Bershad, to discuss a potential plea deal in an ongoing criminal investigation. But for months prior to those developments, lawyers at Lerach Coughlin have been sending out their r�sum�s to other law firms. Meanwhile, the firm recently restructured its executive committee in preparation for Lerach’s potential departure, according to a source familiar with the firm’s internal restructuring. Lawyers at the firm have seen “the handwriting on the wall,” said Erwin Shustak, managing partner of Shustak & Partners, a securities boutique with an office in San Diego, who started receiving r�sum�s every other week from Lerach Coughlin lawyers about six months ago. He said “they felt there was no future for them at the firm.” A distraction Milberg Weiss & Bershad, along with former name partner Steven Schulman, were indicted last year on charges that they made $216 million in attorney fees by paying $11.3 million in secret and illegal payments to lead plaintiffs. Schulman has filed motions to dismiss the charges against him. While not indicted, Lerach and Melvyn Weiss, senior and founding partner of Milberg Weiss, are under investigation as part of the probe. If Bershad were to reach a plea deal with prosecutors, his help in the investigation could spell trouble for Lerach, Weiss and Milberg Weiss. In a June 1 announcement that Lerach was considering retirement, Lerach’s firm stated: “Mr. Lerach is cognizant of the fact that although our firm has never been a target of this or any other investigation, the investigation should not become a distraction to our firm and its ongoing work.” The firm confirmed last week that Lerach is planning to retire by year’s end. Lerach Coughlin name partner Darren Robbins disputed that the firm’s lawyers have been looking to leave. “Historically, the second-tier securities firms have always attempted to obtain those who either did not do well at this firm or wanted to work hours that were a little less strenuous,” he said. With about 160 lawyers on staff, Lerach Coughlin, which broke off from Milberg Weiss in 2004, is the largest U.S. plaintiffs’ securities firm. About 70% of the firm’s lawyers are in San Diego, where associates Matthew Siben and David Thorpe left in recent months for New York-based Bernstein Litowitz Berger & Grossmann. Bernstein Litowitz’s San Diego office has about a dozen attorneys. “We’re very, very busy, and we get r�sum�s all the time and evaluate them on a regular basis,” said John Patrick “Sean” Coffey, co-managing partner of the firm. “We don’t plan to change anything we’re doing in response to what might or might not be going on at Lerach Coughlin.” In March, Reed Kathrein, a partner at Lerach Coughlin and Milberg Weiss since 1994, joined Seattle-based Hagens Berman Sobol Shapiro, where he now heads the San Francisco office. Joining Kathrein from Lerach Coughlin were Shana Scarlett and Sylvia Wahba Keller, both associates, and Jeff Friedman, who is of counsel.

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