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A battle over $54 million in fees between Thelen Reid Brown Raysman & Steiner and a French whistle-blower/erstwhile client has come to an end for now. Last Wednesday, U.S. District Chief Judge Vaughn Walker ruled in favor of the San Francisco-based firm in its dispute with Francois Marland over a fee-sharing agreement. Marland’s lawyers had argued, among other things, that Thelen Reid strong-armed their client into signing a 2002 agreement, which allotted him a $19 million cut of the firm’s fees stemming from the case of an allegedly fraudulent sale of a California insurer. In a demand for arbitration made last year, Marland said he deserved as much as $35 million more of Thelen Reid’s fees. Thelen responded with a suit that was scheduled to go to trial Aug. 6. But this week Walker granted Thelen Reid’s motion for summary judgment, ruling that the 2002 agreement was valid and enforceable. Walker’s order vacated the trial. “We’re pleased and so is Thelen,” said Wendy Thurm of Keker & Van Nest, who represented the firm. “From our perspective, Thelen did an outstanding job for Marland as a client.” The French lawyer approached Thelen Reid in 1997, claiming to have evidence that French banks secretly, and illegally, bought assets of California insurer Executive Life Insurance Co. by using a front company. Thelen Reid, with the aid of Marland, pursued the case through various channels and ultimately got its clients a $715 million payout from a consortium of French bankers in 2005. The legal fees – the source of the dispute with Marland – totaled more than $54 million. Throughout the lengthy case, the fee-sharing agreement between Marland and Thelen Reid shifted several times as the firm also began representing the California Department of Insurance. In the final agreement, Marland’s take was whittled down to 35 percent from what had at one time been more than half. “Thelen and Marland had an interesting relationship; it wasn’t a typical arrangement, but it was entirely appropriate and legal,” Thurm said. “They did some pretty creative lawyering to get him a substantial financial recovery from the matter.” New York lawyer Andrew Hayes, who represented Marland along with local counsel Carlson Calladine & Peterson, said he thought it “was very interesting that the judge held that the renegotiated agreement between Thelen Reid and Marland was not subject to Rule 3-300 of the Rules of Professional Conduct.” The rule states that a member of the bar can’t enter into an agreement that would be adverse to his or her client. Marland had claimed that Thelen Reid had put the Department of Insurance’s interest ahead of his own in the 2002 agreement. Hayes said he didn’t know if an appeal would be filed. “We’re still reviewing our options.” The case number is C 06-2071. This article originally appeared in The Recorder, a publication of ALM.

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