It’s not uncommon these days to see law firms suing former clients over unpaid legal bills (see, for instance, McDermott Will & Emery’s recent $606,000 case). Still, this latest bit of legal fee litigation seems remarkable: Williams & Connolly is taking a former client to court over $2 million after the company practically invited the firm to sue.
According to the complaint, Williams & Connolly and its ex-client, IDT, worked out a payment plan for $3 million in legal fees. IDT made the first $1 million payment, but then stopped paying on the debt.
So what happened next?
Williams & Connolly then received a visit from Shmuel Jonas, the son of IDT founder and chair Howard Jonas. The younger Jonas allegedly informed Williams & Connolly that his father had no intention paying the balance of his company’s legal bills.
The complaint states that Jonas “acknowledged that Williams & Connolly would win in court if Williiams & Connolly filed a lawsuit to enforce the agreement.” But according to the complaint, Jonas also “explained that his father had concluded that IDT ‘could harass Williams & Connolly for a couple of years and then settle out of court for a reduced amount.’”
Refusing to pay a debt, knowing that you can settle for less than the face value, is not uncommon. But it’s tacky to be so brazen about it.
And it’s probably not a wise strategy to employ against Williams & Connolly, which didn’t even bother hiring an outside law firm to chase after the money. As noted by the BLT, “Apparently Williams & Connolly is pretty confident in its chances too. An associate, Beth Stewart, is the only lawyer listed on the complaint.”
Fee Fight: Williams & Connolly Sues Ex-Client for $2 Million [Am Law Daily]
Williams & Connolly Sues Client for $2 Million [The BLT / Blog of the Legal Times]