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Rex Beaber had mixed emotions as he settled into Greenberg Traurig’s Los Angeles conference room on Aug. 8, 2000. The office was in turmoil, and fingers were pointed at co-managing shareholder Carol Perrin. The charges leveled against her were serious: Greenberg lawyers and staffers claimed that she overbilled firm clients, that she mistreated the staff, and that she couldn’t handle the corporate work at Miami-based Greenberg, even though she was head of the department in Los Angeles. As the office’s other co-managing shareholder (a term Greenberg uses instead of “partner”), Beaber was painfully aware of the situation. He wanted it resolved, but he liked Perrin, and wanted to protect her. Larry Hoffman, the Miami-based firm chairman, had been investigating the allegations since May, and now it looked as though he was ready to take action. The night before, on August 7, he had met with Beaber in Los Angeles. According to Beaber, Hoffman spoke of “unquestionably unethical” conduct and “disbarable offenses” by Perrin, and vowed to refund any money due the firm’s clients. (Hoffman agrees that the meeting took place, but disputes virtually every other element of Beaber’s account.) After his session with Hoffman, Beaber recalls, he met with Perrin: “I told Carol that I had good reason to believe that this was serious, and that we needed to start thinking about saving her, or about some sort of graceful exit. She was upbeat, and said, ‘No way, that’s not going to happen.’ “ Late the next morning, Hoffman met with Beaber, Perrin, and Steven Goldberg, the office’s head of litigation and the man who was becoming Perrin’s chief antagonist. Perrin was in a sunny mood, according to Beaber, wearing what he describes as a “Cheshire grin.” Then, Hoffman made his announcement: Perrin had done nothing wrong. Beaber was incredulous. That night, his incredulity turned to anger. At 2 a.m., he sent an e-mail to all the lawyers in the office, calling an “emergency meeting” to announce “a dramatic shift in firm affairs.” At an officewide meeting the next morning, Beaber poured out his wrath in a tirade that left the assembled crowd “slack-jawed,” as one shareholder puts it. Greenberg Traurig is one of the great success stories of the 1990s. Since 1997, the Miami-based firm has opened 10 branch offices and more than tripled in size, growing to almost 800 lawyers. But that growth has come at a price, according to some former Greenberg lawyers who spoke only on condition of anonymity. “They enter markets too quickly, and they don’t thoroughly check the quality of the lawyers they’re hiring,” contends a former shareholder from another branch office that suffered growing pains. “When you do that enough times, it’s inevitable that things will go wrong.” Or, as another former shareholder puts it: “L.A. was bound to happen.” The L.A. story is a cautionary tale of firm expansion run amok. Greenberg’s leaders unknowingly hired partners with histories that would come to haunt the firm. They promoted two into management roles, then removed both as the office turmoil continued to build. By his count, Hoffman, 70, the firm’s chairman, spent more than 300 hours examining Perrin’s billing records. In the end, he cleared her — but rebuked her because “she has caused the firm to expend substantial resources” and “more importantly she initially caused the firm much anguish about whether our clients were properly treated.” Perrin, 49, who declined repeated requests to be interviewed and photographed by The American Lawyer, issued a written statement declaring the allegations to be “completely false.” The fallout continues. Goldberg, 47, stalked out and sued the firm. They’ve settled. Hoffman eventually fired Beaber, 51. Perrin remains a shareholder but no longer plays a leadership role. Bitter feuds broke out among long-time friends — Goldberg no longer speaks to Perrin, with whom he once had a brief affair, or to a small group of former partners who joined Greenberg with him. Hoffman satisfied himself that clients had not been “overcharged” and chose not to have an independent review of Perrin’s bills. The American Lawyer, however, retained The Devil’s Advocate, an Alexandria, Va.-based firm that audits legal bills, to conduct an informal review. The Devil’s Advocate looked at hundreds of Greenberg billing records for the period of January through June 2000, and concluded: “Based on the information provided, there is evidence supporting the proposition that clients were charged for work under Ms. Perrin’s name and at her hourly rate that was actually done by others, who billed, if at all, at lower rates.” Hoffman rejects that view, arguing that many of Perrin’s clients were billed a flat rate, making the accuracy of the time records irrelevant. He also says that his review was far more comprehensive and his conclusion more accurate. Greenberg Traurig opened its Los Angeles office on Jan. 3, 2000, with Perrin as the managing shareholder and biggest rainmaker. A few months before, she had met with Marvin Rosen, who was a member of the firm’s executive committee at the time. He had employed Perrin in Miami in the late 1970s after she graduated from Western New England College School of Law, and they’d kept in touch sporadically ever since. Shortly after the meeting, Rosen mentioned her to Hoffman, the point man in Greenberg’s expansion push, who was exploring the firm’s Los Angeles options. Along with firm CEO Cesar Alvarez, Hoffman has near-total authority over the firm. Hoffman and Rosen say they were impressed by Perrin’s busy trusts and estates and tax practice in L.A. They also found her winning and well liked. “When we were doing the interviews, I was amazed at the number of people that would stop her in restaurants. She appeared to be extremely popular,” says Hoffman. They were also impressed by Perrin’s knowledge of the Los Angeles legal scene and her ability to suggest other lawyers for Greenberg’s new office. But the problems that would haunt Greenberg had been well established in Perrin’s own office. Perrin employed a single associate; turnover was high because Perrin’s nasty behavior toward subordinates drove most associates away after only a few months, according to two former associates in the office. And Perrin used the same billing method in her own office that would cause the trouble at Greenberg, according to Deborah Fox, an associate who worked in Perrin’s firm. (Fox then followed her to Greenberg in order to join a growing, national firm and a corporate department populated by other lawyers.) The personality issues and billing details are also confirmed by secretary/paralegal Sheila Tiner, who also worked in both places. Hoffman and Rosen say they weren’t aware of any problems with Perrin’s billing practices when they hired her, and that she told them that her inability to get good associates was one of the reasons she was interested in joining Greenberg. One lawyer she introduced to Hoffman and Rosen was her neighbor Goldberg, the head of a 10-lawyer litigation boutique, Goldberg, Scott, Belfield, Steinberg & Cohen. Goldberg is a respected litigator who started his career at New York’s Cravath, Swaine & Moore in 1978, then moved to California and joined Manatt, Phelps & Phillips in 1980. Big, baby-faced, and gregarious, he tends to be a major presence in a law office. In late 1999 Greenberg acquired the Goldberg Scott firm, getting a team of experienced litigators, associates, staff, and office space. Unknowingly, Greenberg also got a lawyer who isn’t shy about using litigation on his own behalf. In 1988 Goldberg had joined McCambridge, Deixler & Marmaro, a spin-off of Manatt. When he left to start his own firm in 1996, he sued McCambridge in a dispute about the amount of capital owed him. In addition, he left McCambridge briefly to be general counsel of a television shopping venture being launched by Fingerhut Companies Inc., a catalog marketing company. The venture went south, and Goldberg sued for breach of contract. Both cases settled. Hoffman says that it never occurred to him to ask Goldberg about his previous involvement in litigation. Greenberg also got some personal history. Perrin and Goldberg were friends: They lived in the same neighborhood, they were both single parents, their kids played together. On occasion, their relationship “went beyond friendship,” in Goldberg’s delicate phrasing. Hoffman knew nothing about their past. And even though the romance was over by the time Greenberg launched in Los Angeles, Hoffman feels he should have been told. When he was asked about the couple’s relationship, Hoffman replied, tersely, “I thought that full disclosure would have included a lot more information than I had been given.” The drama began soon after the Los Angeles office opened. Within weeks, say former shareholders and staffers, Perrin’s behavior toward others in the office began to sour the atmosphere. As the liaison between Perrin and the staff, office manager Maria Wilson was on the front lines. “I was the in-house psychologist for the entire office,” she says. “Almost every day, somebody would come into my office, crying, because Perrin had screamed at them. She did it in front of clients a lot. I had to go and ask her to be nicer to people. She would tell me they were morons, that the staff got what they deserved.” But it wasn’t only staff members who were complaining. “During those first few months, [shareholder George] Belfield, [shareholder Matthew] Steinberg, and I would say to Steve, ‘Hey, your friend Carol is causing disruption. The staff’s not happy, and we’re not happy,’ ” recalls current Greenberg shareholder (and former Goldberg Scott partner) Jeff Scott. “ We’d ask Steve to talk to her and fix things. But because of their relationship, being next-door neighbors and other things, he was very reluctant to communicate to her our dissatisfaction. He was quite protective of her.” In addition to her abrasive management style, Perrin’s corporate work, which was more complex at Greenberg than in her own firm, quickly began to attract notice. “Perrin didn’t have a clue,” says Fox, her associate. “I was the corporate department, and I didn’t have the experience to handle it.” Steinberg, another current Greenberg shareholder and former Goldberg Scott partner, diplomatically agrees. “In terms of competency,” he says, “Carol should have stuck to her fields of expertise — trusts and related tax work.” Most notably, Perrin continued to use the same billing practice that she had used in her own firm, according to Fox and Tiner. On any given day, she would submit up to four different time sheets: her own, plus time sheets by contract attorney Sharon Newman, paralegal Sharon Coryell, and secretary/paralegal Tiner. The documents show that Perrin wrote her own name at the top of each. She would then give them to her secretary for entry into Greenberg’s computerized billing system. Clients were eventually billed for all of the work as if Perrin had done it, at Perrin’s rate of $375 per hour. Throughout the spring, the atmosphere in Los Angeles deteriorated. Lawyers and staff grew increasingly aggrieved by Perrin’s behavior. Client complaints about her billing were common, according to office manager Wilson and Dewonda Flowers, an employee in the accounting department. They both say that they dealt with irate clients on a weekly basis. Flowers remembers a client calling and asking, “How come I get billed for calls with Carol when I only speak with Sheila [Tiner]?” She estimates receiving at least 10 other calls making similar complaints. In May, the situation in Los Angeles came to a head. A mistake was made in the corporate work, and Fox was worried that Tiner would be unfairly blamed for it. She went to see Steinberg, who was known to the associates as a sympathetic ear, to tell him that it wasn’t Tiner’s fault. Fox looked troubled, prompting Steinberg to ask, “Is there anything else I should know?” Fox hesitated, then told him about Perrin’s billing practice. Steinberg says that he found her story “alarming,” and reported it to Richard Garrett, the firm’s general counsel in Miami, who passed the information on to Alvarez and Hoffman. He also told Goldberg, who was becoming less and less inclined to defend Perrin from the other shareholders. Hoffman met with Goldberg a few weeks later in Los Angeles. Goldberg says that he stressed the importance of the billing issue and told Hoffman that the matter should be referred to an independent auditor. Hoffman also met with two litigation associates, who were representing all the firm’s associates, and who had requested the meeting to tell Hoffman about their unhappiness with Perrin. Although Hoffman didn’t share it at the time, he was becoming increasingly discontented with Perrin. “I was out there on a regular basis,” he says. “I began to find that things were not as I like them to be.” A week after those meetings, in order to improve the mood in the office, he promoted Beaber to co-managing shareholder. Beaber was a sole practitioner who had been recruited to Greenberg in March by Goldberg. They are both ranked players in United States Chess Federation standings, and they knew each other from tournaments. Beaber’s practice includes both litigation and acting as an outside general counsel to e-MedSoft.com, an Internet company serving the medical industry. Wiry, with graying hair, Beaber speaks quickly and loudly, reeling off the highlights of his remarkable resume. Before becoming a lawyer, he had been a criminal psychologist whose work included consulting for the Los Angeles County district attorney’s office on the Charles Manson case. He started his legal career at the Los Angeles office of Sidley & Austin. Chief Justice William Rehnquist once offered him one of three positions as a judicial fellow at the U.S. Supreme Court. He turned it down because of his disagreement with the Court’s conservative tilt, a disagreement illustrated by the pictures of himself with Bill Clinton that decorate his office. (Beaber coyly describes his relationship with Clinton as “confidential.”) Despite — or perhaps, because of — his professional history, Beaber illustrates a potential stumbling block in Greenberg’s growth strategy. The firm prides itself on hiring “entrepreneurs” and “mavericks.” But being part of an 800-lawyer operation requires a lawyer to conform to certain standards of behavior, and “conform” is not a word with which Beaber is comfortable. He’s the first to admit that he’s too iconoclastic for most law firms. Nonetheless, Beaber says that Hoffman liked him and treated him as a confidant. Hoffman admits that Beaber is “brilliant,” but also calls him a “wild man” because of his refusal to play by big-firm rules. At the time of his promotion in June, Beaber had the singular distinction of being on good terms with all combatants. That distinction wasn’t destined to last. “I told Hoffman that I was the worst of choices, but that I would do it for a while to make peace,” he recalls. “I liked both Goldberg and Perrin, and I wanted to save the operation.” The firm’s announcement insisted that Beaber and Perrin would share the managing shareholder position, but Hoffman made it clear that Beaber would have the real authority, according to Beaber and several shareholders. And for a while, things did get better. The office was growing, reaching about 20 lawyers by midsummer. Goldberg says that he assumed that Hoffman was properly investigating the billing situation, so he didn’t push the issue. With Beaber as the main liaison to the staff, morale improved. But secretary/paralegal Tiner says that Perrin’s treatment of her was getting worse. Tiner began seeing a hypnotherapist to help her deal with the tension. The therapist advised her to keep a diary; Tiner gave a copy to The American Lawyer. Most of the diary is a litany of the indignities Tiner says she suffered at the hand of Perrin, but some addressed the billing controversy:
-May 22, 2000: Carol asked me to copy all of my time sheets since I have been at Greenberg Traurig and to stop keeping my time. I asked her what was going on and she said that Deborah Fox had told someone that she [Perrin] was billing my time, Sharon Coryell’s time, and Sharon Newman’s time, and she [Perrin] was being investigated. Then she wanted to know what I was going to say. This took me by surprise but I also told Carol that she knew me well enough that I would not lie … . -June 22, 2000: … She [Perrin] continued to tell me that under no circumstances was anything, including cover letters (i.e., enclosed please find), to leave the office without her review and signature. For the last two years I have signed [with Perrin's signature] almost everything that has left my office, with Carol’s permission and her instruction to do so. I told her I would do what she asked. I am very tired of all this controversy. I later discovered why she wanted to sign everything. -When she signs the documents that I have completed, she puts time on her time sheet.

In early July, Tiner gave a copy of the diary to Goldberg, hoping it would force the firm to take action against Perrin. Goldberg forwarded it to Hoffman and Richard Garrett, the firm’s general counsel. In August, the situation in the Los Angeles office changed from chronic to acute. Over the next couple of months, the mood in the firm would get uglier, and the divisions would deepen. Hoffman and Beaber met on August 7. According to Beaber, this was when Hoffman told him about Perrin’s “unquestionably unethical” conduct and “disbarable offenses.” Hoffman, however, has a totally different take on the meeting. “Beaber said to me, out of the clear blue, that he was a friend of Carol, that he knew that I was doing this investigation, and that he wanted me to know he wasn’t concerned about it and didn’t think we should be either. I didn’t tell him what my conclusion was in any respect.” Hoffman says that the next morning, he told Beaber, Goldberg, and Perrin that “from where I stood at the time, it looked to me like there was substantial evidence to indicate that there may not be a problem.” Then, according to Beaber and Goldberg, Hoffman went on to announce his intention to investigate the litigation associates in the office for padding their hours. As part of that investigation, he told them he was requesting the building parking records in order to determine the hours they were in the office. The allegations against the associates were totally baseless, according to virtually every shareholder in the office. Hoffman denies that there was ever an investigation. “When I left that meeting, I was confused,” says Beaber. “I couldn’t understand how he [Hoffman] could reverse himself so totally, so quickly. The more I thought about it, the madder I got.” Late that night, he sent out the e-mail declaring the “dramatic shift in firm affairs,” and calling a meeting of all the lawyers in the office to announce that shift — his resignation as co-managing shareholder. The next day, Beaber made his announcement to the assembled staff, then let loose, calling the firm chairman a “pathological liar” and a “malicious bureaucrat.” He also gave a full briefing on the investigations of Perrin and the litigation associates. The meeting lasted about 20 minutes; the reaction in the room was stunned disbelief. “It was the single most surprising, unbelievable thing I’ve seen in 20 years as a lawyer,” says shareholder George Belfield, another of Goldberg’s premerger partners. Hoffman declines to comment on Beaber’s characterizations. Looking back, Beaber can only speculate about the cause of what he saw as Hoffman’s reversal. “Carol always told me that she had friends in Miami,” he says. “And I think she convinced Hoffman that without her, the Los Angeles office would fall apart. She might have been right — she was the biggest source of revenue in the office.” Beaber expected to be “summarily fired” when word of his diatribe got back to Miami. Instead, Hoffman focused on the other shareholders, whom he blamed for not speaking out in his defense. At a meeting the next week, Hoffman told Goldberg, Steinberg, Scott, and Belfield to write a memo expressing support for himself and the firm, and denying that an investigation of the litigation associates’ billing had ever been discussed. He even gave them notes specifying the contents of the memo. According to a copy of the notes, Hoffman requested that the lawyers state “GT and it’s [sic] management have demonstrated the very highest integrity on all matters at all times,” and that “there is no investigation of associate hours.” Concerned that Goldberg would try to undermine the message, Hoffman warned against “sub rosa communication,” and “winks of eye.” Several drafts of the memo went to Miami for Hoffman’s review, but they didn’t meet with his approval. Finally, Hoffman e-mailed Goldberg that if he couldn’t make the statements specified in his notes, “it would be in everybody’s best interest that we hold friendly and civil discussions with a view toward separating your group from the firm.” Under that cloud, Goldberg, Steinberg, Scott, and Belfield circulated a memo that included the statements specified by Hoffman. It came to be known around the office as the “hostage memo.” The “hostage memo” was the last straw for Goldberg. He says he’s very protective of the people who work for him, so denying the investigation of the associates was particularly galling. On the morning of Sept. 11, Hoffman and Goldberg had a polite, anticlimactic meeting. Hoffman said that he had cleared Perrin, and Goldberg responded, “If that’s your decision, then I have to go.” But his exit did little to quell the noxious atmosphere. Rumors linking Goldberg romantically with a number of women in the office started almost immediately, prompting Beaber to e-mail Hoffman: “[You have] asserted that Mr. Goldberg left the firm because Ms. Perrin had rejected his further sexual advances … . You apparently are involved in a defamatory campaign against Mr. Goldberg.” In previous e-mails to Hoffman, Beaber had written, “I have witnessed you [Hoffman] directly lie to shareholders and associates regarding our private conversations.” He accused Hoffman of being in a “conspiracy, after the fact, to cover up acts of fraud,” and of being “more interested in protecting the firms [sic] fragile reputation than standing strong against wrongful and despicable conduct.” He made a point to copy all attorneys in the office when he sent the messages and, by this time, his e-mails had become notorious. “I was in Florida taking depositions for a lot of the summer,” says shareholder Jeff Scott. “These e-mails to Hoffman would appear out of nowhere. They were incredible.” Eventually, Hoffman ordered a computer technician to delete the “L.A.-All” address from Beaber’s e-mail program. Beaber simply borrowed another computer in the office, and continued his electronic assault. Hoffman declines to respond to Beaber’s charges. But the firm showed no such reticence in April, when it answered a complaint filed against it by Tiner for a number of labor violations. Although Beaber isn’t a party to that suit, the answer takes a number of shots at him personally. It says that Beaber’s conduct “often bordered on bizarre,” that he was engaged in “disruptive activity,” and that he “became aggressive and obnoxious and his physical demeanor reflected that of a disturbed individual.” Beaber responds: “If it’s bizarre to act independently and with a bit of integrity, then I plead guilty.” Hoffman intended his investigation to settle the question of Perrin’s billing. In his preliminary report, prepared in September, Hoffman concluded: “[Perrin] did not engage in a fraudulent practice and … it is highly unlikely that any client has been overcharged or materially misled.” He based his conclusion on his finding that Perrin’s billing method was reasonable: “[H]aving other members of the group keep accurate time on all the matters that they worked on and then using their summaries and entries as a basis for recalling the time that she had spent is a reasonable basis for collecting her time given the very close work groups that existed.” Hoffman reached the same conclusion in his final report, which he completed about a month later. No money was ever refunded to the clients. Perrin sees Hoffman’s report as vindication. In her statement to The American Lawyer, she wrote: “I always put the interests of my clients first, and I am gratified that Greenberg Traurig’s extremely thorough, intensive, and unbiased investigation has proven this to be true.” Hoffman says he reviewed all billing documents and invoices for the year 2000. He also claims to have interviewed everyone with knowledge about the billing, but this is disputed by the subjects of those alleged interviews. For instance, Hoffman says that he interviewed Deborah Fox, but she denies that he ever asked her about the billing, even though it was her report to Matt Steinberg that set the investigation in motion. He admits that he didn’t interview Dewonda Flowers, who actually prepared the bills for Perrin and who often spoke with her clients. And his report includes the summary of an interview he allegedly did with paralegal Sharon Coryell, in which Coryell exonerated Perrin. But at the time the report was written, no such interview had taken place. Looking back, Hoffman says that he accidentally summarized the Tiner interview under the “Coryell” heading. But the report refers to the person interviewed as a “probate paralegal.” That description applies to Coryell, not Tiner, whom Hoffman once referred to as a “mere typist” during a shareholders’ meeting. Hoffman’s office in Miami contains 10 thick binders that he says hold the materials produced by these interviews and the rest of his investigation. He’s clearly not happy that the issue consumed so much of his time, which begs the question, “Why not hire an independent auditor?” — as Goldberg had asked. Hoffman says he wanted to conduct the initial investigation himself, and only refer it out if he made the initial conclusion that further scrutiny was required. But The American Lawyer decided to hire its own outside observer. The Devil’s Advocate has conducted hundreds of audits for both clients and firms; courts have admitted its findings dozens of times. The firm cautioned that it lacked the information to conduct a formal audit, but its conclusion, based on thousands of Perrin bills between January and July 2000, is damning: “Clients were charged for work under Ms. Perrin’s name and at her hourly rate that was actually done by others, who billed, if at all, at lower rates.” The auditor said that it was able to ascertain both the method used by Perrin, and her attempt to conceal it: “We could trace the entries, e.g., by noting that Perrin’s handwriting appeared on original records for time apparently recorded by each of the others [Newman, Coryell, and Tiner] and by following the entries into the GT printout and bills. In many instances, Perrin’s name was inserted on the other person’s time record, and the time appears verbatim or nearly verbatim in the GT printout and corresponding client bills. Of the original time entries that were altered, apparently in Ms. Perrin’s hand, typical alterations include deletion of references to herself (thereby avoiding sending the client a bill in which she appeared to be talking to herself) … . While there may also be benign explanations for these particular alterations, they are also consistent with an effort to conceal the original source of the time entries.” The auditors also reviewed Hoffman’s report, and found that “the conclusions by the author are not supported by the evidence summarized nor by what we have seen.” By examining the month of April 2000 in depth, The Devil’s Advocate reached more specific conclusions about the alleged fraud. Perrin is credited with 203 billable hours in Greenberg’s computerized system. Of that, 94.6 hours was work that initially appeared on the time sheets of Newman, Coryell, or Tiner. If billed at Perrin’s standard rate of $375 an hour, that would equal $35,375. Of the 203 hours entered into the Greenberg system, The American Lawyer has client bills that account for 65.8 hours. (We weren’t able to get the rest.) All of those 65.8 hours were billed as Perrin’s time; more than half of that time initially appeared on the time sheets of Newman, Coryell, or Tiner. Hoffman issued a statement that disputes The Devil’s Advocate’s report on a number of grounds — some drawn from his own investigation, some based on what he calls an “educated guess.” His statement:

One must measure the very qualified conclusions of The Devil’s Advocate letter against Greenberg Traurig’s 300-plus-hour extensive investigation. The Devil’s Advocate based their qualified findings upon a few limited and misleading “documents” that were obtained by The American Lawyer from a disgruntled former employee. The Greenberg Traurig investigation included a complete review of hundreds of bills, files, logs, and interviews with all of the key relevant individuals. Based on this thorough investigation, we stand by our firm conclusion that clients were not overbilled or misled by this lawyer. To come to a different conclusion based on an extremely limited review by The Devil’s Advocate would be unfair.

Hoffman makes two additional arguments in defense of Perrin. First, he says that many of her clients were billed on a flat-fee basis, so that the accuracy of the time records is irrelevant. At times, he says, invoices were prepared for internal purposes only, and don’t reflect the fee actually charged to the client. But, after first agreeing to do so, Greenberg failed to provide a detailed breakdown of how many clients were charged on an hourly basis, and how many were billed a flat fee. Second, Hoffman says that he received hundreds of detailed explanations from Perrin about thousands of time entries. This explanation of a February entry is typical: “I received a fax regarding accounting, which I read and gave to Sheila to fax to Coryell and I spoke with the accountants doing the returns, which information I also gave to Sheila to convey to Coryell. I billed for my time, which had a description ‘reviewed fax and telephone call re accounting’ at .2 for both.” That explanation was made in October about 12 minutes of work done eight months earlier. Hoffman acknowledges the credibility questions. “Obviously, I was wondering how anybody could be that good at recalling things. And, look, you can never be sure. You weren’t there. But she had good recall, and there was a lot in the client files.” The repercussions from the Perrin controversy touched virtually everyone who had been on hand when the office opened. In October, Perrin was replaced as managing shareholder. “She had to make a substantial change in her management style when she moved from her office to our office,” Hoffman says. “We made a mistake in expecting her to rise to the occasion of a larger office.” A couple of months later, in December, Beaber paid the expected price for his outspokenness. One day he returned to the office from lunch only to find a security guard standing outside his office, barring his entry. He eventually had to threaten a lawsuit in order to get his possessions back. He has since returned to his solo practice, and continues to threaten a suit against Greenberg. Deborah Fox is also threatening a suit. She resigned in October, and is raising horses with her husband on a ranch near Bakersfield, Calif. Sheila Tiner resigned in February 2001, and has a suit pending against Greenberg, alleging a number of labor violations. Greenberg has denied those allegations. Although he once suggested to Hoffman that he and the firm “quietly separate,” Goldberg didn’t go quietly. As he had done with McCambridge, Deixler and Fingerhut, Goldberg sued Greenberg Traurig, and Perrin and Hoffman individually, for fraud, breach of his shareholder agreement, and breach of fiduciary duty. The complaint was filed in early February; the case settled three weeks later. Citing a confidentiality agreement, neither Goldberg nor Hoffman will discuss it. Goldberg was the most visible person in the office while the Perrin controversy was raging, and speculating about his motivation is a favorite diversion for many of those involved. Perrin and Hoffman think he wanted to run the office. Perrin’s statement reads: “This entire matter was concocted and continues to be fueled by the personal animus of a couple of disgruntled lawyers and previous employees, who, among other individual personal agenda goals, attempted to take control of the office and failed.” Goldberg denies his interest in management, and Matt Steinberg agrees. “Steve wasn’t bucking for promotion,” he says. A few shareholders question whether bad feelings about his romantic relationship with Perrin were a factor. “He’s vindictive, he’s motivated by hatred,” says one. Goldberg dismisses the idea, and Steinberg, Scott, and Belfield point out that the relationship ended on what seemed like good terms, and that they never saw any indication that either one wanted to start it again. On the other hand, many people agree that Goldberg’s loyalty to the staff was a big factor. “I’m sure he was out to protect people. I’m sure he was out to protect the litigation associates,” says Belfield. Goldberg says he wanted to disassociate himself from what he saw as unethical conduct: “In part, it was selfish. For my own reputation, for my own standing in the community, I didn’t want to be at a firm where clients were being systematically overcharged. In part, it was altruistic. I didn’t like the idea that clients were coming to an office that I was part of, and were being taken advantage of.” He has returned to Manatt Phelps & Phillips. Three associates, the office manager, and a paralegal followed him. One victim of the controversy is the relationship between Goldberg and his former partners. They were close friends for many years, and had been through two big professional moves together; founding Goldberg Scott, then moving to Greenberg Traurig. Now they don’t speak. Much of Scott’s, Belfield’s, and Steinberg’s anger comes from Goldberg’s complaint against Greenberg, which was unusually detailed and included the merger agreement between Goldberg Scott, and Greenberg Traurig, and its financial information, as an exhibit. Goldberg says that he did it to gain a litigation advantage, and points to the quick settlement as vindication. But Scott, Steinberg, and Belfield see it as a conscious decision to slam Perrin and the firm, not caring who else got hurt. “We’d been friends for 20 years, our wives were friends, our kids were friends,” says Steinberg. “By writing that complaint, he burned it all off.” To Goldberg, this was the biggest cost of his candor. “I didn’t want to lose my friends over this,” he says. Greenberg’s Los Angeles office is now a success, say Hoffman and Alvarez. It has grown to about 35 lawyers, and moved to plush new offices in Santa Monica, Calif., early this year. The office continues to experience turnover, however, and the controversy didn’t win Perrin many friends in the office or among firm management. “She’s caused me a lot of trouble,” says Hoffman. “I have a lot of disappointment.” Hoffman and Alvarez say that the problems in Los Angeles must be seen in light of the firm’s wildly successful expansion, which has boosted revenue 300 percent since 1997. “In the context of our growth, this is a minor cost,” says Alvarez. Would he do it again? Absolutely. “The benefits we’ve achieved far outweigh the relatively minor costs. You’ve got to view this in a business context.” And he and Hoffman are unrepentant about backing Perrin. “Getting rid of Perrin would have been the easy thing to do,” says Alvarez. But he says that Perrin “didn’t commit billing fraud,” and that they refused to sacrifice her merely because she was “sloppy” or had unpleasant personality traits. Alvarez and Hoffman did take the charges against Perrin and the firm seriously. In April, Alvarez visited The American Lawyer offices to tell his side of the story. Alvarez visited again in May, this time accompanied by Larry Hoffman, who was lugging a suitcase full of dog-eared billing records. Hoffman talked about a cabal arrayed against himself and Perrin, and said he was surprised at the virulence of it. “At first, I didn’t fully realize how much a conspiracy I was facing,” he said. Alvarez, meanwhile, was careful to defend his partner’s honor: “My biggest issue has been what Larry went through. I’ve seen people question his character and his integrity, and that’s been painful to me personally.” As they recounted the past year, they talked like veterans of “open warfare,” like two soldiers who had been under sniper fire from hidden locations. “It hurts,” said Hoffman. It surely must. Especially since so many of the wounds were self-inflicted.

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