The Walt Disney Company�s in-house lawyers pride themselves for being hands-on. They don�t just turn a matter over to outside counsel and passively watch how the hired help handle the problem. But Disney has taken this attitude to an extreme in a nasty breach-of-contract dispute with former studio chief Jeffrey Katzenberg. Disney general counsel Louis Meisenger went so far as to take the first-chair trial role. The result looks like a debacle.

At a minimum, the entertainment giant�s handling of this trial is a public relations disaster. But on the legal front, Disney also seems to be stumbling badly. At press time the trial was still under way, and Katzenberg had won a key victory. But regardless of the outcome, this case may come back to haunt Disney. Some testimony about the studio�s internal accounting may expose it to suits by others who feel the company has similarly cheated them out of money.