Ex-Biglaw Attorney Files Lawsuit Claiming His Former Firm Hung Him Out To Dry

If you get into legal trouble as a result of work you perform at a law firm, shouldn't that firm cover the cost of defending you?

If you get into legal trouble as a result of work you perform at a law firm, shouldn’t that firm cover the cost of defending you? That, in a nutshell, is the question presented by a lawsuit recently filed against Bryan Cave by one of its former lawyers.

Here’s a report on the case from Law360:

Bryan Cave LLP doesn’t carry professional malpractice insurance for its individual attorneys, a former employee said in a New York state court suit Wednesday, demanding at least $2.5 million for his criminal defense of charges related to an alleged scheme to buy Maxim magazine.

Harvey Newkirk, a former Bryan Cave attorney who has previously accused the firm of selling him out to the government in connection with the criminal case, said the firm’s employment handbook says it carries a professional liability policy, but the policy’s retention fee is so large it effectively can’t be used by individual attorneys, according to the complaint.

How large? According to Newkirk’s complaint (see paragraph 5), a cool $5 million.

Here’s a bit about the underlying litigation in which Newkirk seeks to have his costs covered, arising out of a transaction involving a somewhat salacious media property:

Newkirk in April pled not guilty to charges of helping a client fraudulently obtain more than $8 million in bank financing to acquire Maxim magazine and trying to fraudulently obtain $34.5 million more….

Two lenders forked over more than $8 million and Newkirk tried to coax $14.5 million from a third potential lender and $20 million from a fourth, an April 21 superseding indictment says.

Helping clients secure financing for deals sounds like, well, the job description of many transactional attorneys. Could other corporate lawyers find themselves in similar trouble — and left to fend for themselves by their firms?

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Bryan Cave didn’t comment to Law360 (and hasn’t responded to us yet either). If the firm were to comment, I suspect it might draw a distinction between defending its lawyers from malpractice claims and defending them from criminal charges. But in what some critics call the age of overcriminalization, the line between ordinary business dealings and culpable conduct isn’t always so clear.

If you work at a Biglaw firm, you might want to find out your firm’s policy on covering or advancing defense costs when lawyers get into trouble as a result of their firm work. You shouldn’t necessarily assume — as Harvey Newkirk claims he did, based on communications and conduct of Bryan Cave — that Biglaw has your back. When there’s a lack of clarity over who represents whom, the results are sure to be ugly.

Ex-Bryan Cave Attorney Wants Firm To Cover $2.5M Fraud Defense [Law360]
Newkirk v. Bryan Cave LLP: Complaint [New York Supreme Court]
Bryan Cave Accused Of Misconduct In Fraud Probe Of Ex-Attorney [Law360]

Earlier: Skadden Partner Retires While Prosecutors Allege ‘Serial’ Misstatements

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