Daniel Gerber Daniel Gerber, founding partner of Gerber Ciano Kelly Brady.  Courtesy photo.

After several partners left to create their own insurance and litigation firm, Goldberg Segalla’s managing partner, Richard Cohen, downplayed the significance of the exits, claiming the lawyers were not large business generators.

But a partner in the departing group, Daniel Gerber, countered Monday that the lawyers are moving over substantial business, with key corporate and insurance clients. “We left because we thought we could have a more transparent and more inclusive environment,” Gerber said.

Gerber and five partners from Buffalo-based Goldberg Segalla formed a new midsize law firm, Gerber Ciano Kelly Brady, and have brought with them about a dozen other lawyers from Goldberg Segalla. The six partners, including  Gerber, Frank Ciano, William Kelly, Dennis Brady, Paul Devine and John Jablonski, are in Manhattan, White Plains, Buffalo and Long Island, according to their website.

The spun-off firm will have more than 20 lawyers by the end of this week and could have 40 to 60 lawyers by the end of the month, Gerber said, adding those new hires may come from Goldberg Segalla as well as other firms.

Meanwhile, Goldberg Segalla and Gerber Ciano are discretely battling in state court. An entire docket has been sealed in a case brought by Gerber and others against Cohen and others, according to court records.

In another court docket in Erie County, Goldberg Segalla filed a vaguely worded petition on Nov. 20 against the six departing partners, claiming they breached the partnership agreement “in what will be further described” in a submission under seal. In the filing, Goldberg Segalla said it intended to seek resolution of the dispute under an arbitration provision in the partnership agreement and it was seeking a temporary restraining order in aid of arbitration, without describing in detail its requested relief. The firm told the court it “will suffer irreparable injury and substantial harm” to its ongoing business without a court order. The publicly filed petition has now been discontinued.

Leaders of both firms in interviews declined to discuss the issues involved in the sealed docket.

The case is the latest in a string of litigated partnership disputes in New York, such as those entangling Paul Napoli and Marc Bern, as well as Ross Cellino Jr. and Stephen Barnes. But unlike those, Goldberg Segalla is one of the largest regional defense firms in the Northeast and, according to Cohen, it currently has about 350 lawyers in 19 offices in nine states.

Cohen said Goldberg Segalla’s revenue was more than enough to place the firm in the Am Law 200 rankings, which began this year at $91 million.

In an interview Monday, Cohen said the group’s departure would have no impact on the firm’s revenue and the firm has added about a dozen layers since they left.

“None of them were significant business generators,” Cohen said. “We believe the partners we have brought in just in the last two weeks will have already replaced that business.”

Goldberg Segalla’s strategic plan “hasn’t changed at all,” Cohen said, and “we’re going to continue to grow in response to the opportunities that our clients thankfully continue to provide us.” The firm has added nearly 80 lawyers in 2017 alone, he said.

Cohen pointed to disagreements over leadership positions as one factor behind the split.

“We have been an extraordinary successful firm for our 16 years’ existence. Some of the people in that group wanted to have leadership positions at this firm that they were not going to get, and so my best guess is that they created their own firm so they could have leadership positions,” Cohen said.

Goldberg Segalla has a “different business model for a law firm,” he said. “We look for people who are team-oriented, who don’t have outsized egos, who can subordinate self-interest for the betterment of clients and for the firm as a whole, so not everyone fits here,” Cohen added.

‘Significant amount of the matters’

But Gerber, one of the six partners who left, disagreed with Cohen on a number of points. “A very significant amount of the matters we were working on and had people working on are transferring.”

Gerber declined to quantify the firm’s business, but said, “It’s enough to substantiate the hiring we have set out.”

The group represents a number of insurance companies in litigation and other services, such as in professional liability, transportation, reinsurance, regulatory, compliance and products liability. The partners also represent corporations in products liability and commercial litigation.

Their clients include Port Authority of New York; Delta Air Lines; Combined Insurance, a Chubb company; Enstar; and ProSight Specialty Insurance.

Meanwhile, Gerber said five of the six departing partners were at the highest rung of equity partnership, with the most privileges at Goldberg Segalla, and pointed to leadership roles they used to maintain there. For instance, Gerber said he was on the firm’s compensation committee for three years and co-chair of its global insurance practice, Ciano was on the firm’s compensation committee this year and Jablonski and Kelly were on Goldberg Segalla’s elevation committee for promotion decisions. None of the six were vying to become managing partner, Gerber said.

Although he declined to detail specific disputes in litigation, Gerber said they left the firm because they said they wanted “transparency and inclusion” in leadership and how decisions are made. “We left because we thought there was a better way of meeting those goals,” he said.

Gerber also pointed to changes in Goldberg Segalla’s partnership agreement in recent years that contributed to their exit.

On Monday, Gerber Ciano added its first female equity partner, Long Island-based Joanna Roberto, who focuses on insurance coverage, products liability and commercial and aviation litigation. And on Dec. 1, Gerber Ciano added White Plains-based Jensen Varghese, who focused on products liability and commercial general liability disputes. Both came from Goldberg Segalla.

Gerber said the new firm has already found office space in eight cities. None of the office space is from Goldberg Segalla. “We do not anticipate being some mega several-hundred-lawyer firm. We’d like to keep it to a reasonable and manageable size that stays within our vision,” Gerber said.