Headhunters / Recruiters, Lawsuit of the Day

Lawsuit of the Day: Major Lindsey Files RICO Action Against Former Employee

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The world of legal recruiting is a bit like Glengarry Glen Ross. Like the real estate agents of Glengarry, legal recruiters work mainly on commission, and they get paid when they close deals. Instead of getting paid for selling parcels of land, though, headhunters get paid when they find lawyers — people like you — new employment (most often at law firms, although sometimes in-house as well).

Like Glengarry, the world of legal recruiting features outsized personalities, profanity-spouting hustlers, and smooth-talking salespeople (the folks who cold call you and try to lure you away from Big Firm A to Big Firm B). Given the sheer number of recruiters working today, the fierce competition for deals, and the fees at stake — moving a group of powerful partners from one firm to another can result in a six- or even seven-figure payday — it’s not surprising that the business has a seamy side.

In a lawsuit filed earlier this year, which has come to light thanks to some recent, non-sealed court filings, one of the biggest attorney search firms out there — Major, Lindsey & Africa — has made RICO claims against an ex-employee.

Wait a sec. RICO — as in the Racketeer Influenced and Corrupt Organizations Act? Some say legal recruiting can be a dirty business, but it’s not that dirty, is it?

(And are law firm associates going to start getting voice mails from Teamsters? “Hey there, uh, David, my name is Sal….”)

Let’s explore the allegations of MLA’s lawsuit against one its former recruiters, Sharon Mahn….

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Leigh Jones of the National Law Journal reports:

Major Lindsey alleged in a civil Racketeer Influenced and Corrupt Organizations Act action filed in the U.S. District Court for the Southern District of New York that former managing director Sharon Mahn, while working at the placement firm, took proprietary information about attorney job openings from the firm’s computers and gave it to at least one competing placement firm. Other defendants named in the case are New York search firms Kagan Consultants Inc. and Parker Leland Inc.

Sounds juicy. In a sales-oriented business — again, see Glengarry — it’s all about the quality of the “leads.” If your competitors are getting your leads, you’re losing a lot of your edge.

Alas, because the original complaint by MLA was filed (and remains) under seal, we don’t know all the allegations. For example, it’s not clear how Mahn allegedly provided the proprietary info to MLA’s competitors. Here’s to hoping that she used invisible ink and left unmarked envelopes on park benches, a la the Russian spies.

The allegations are sexy, and dropping the RICO bomb is hot. And there are additional claims too: violations of the Computer Fraud and Abuse Act, a claim for an equitable accounting of the defendants’ firms, breach of fiduciary duty, misappropriations of trade secrets, and unfair competition.

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But right now the lawsuit is, like many a civil action, bogged down in procedural squabbling over the proper forum:

[T]he parties are sparring over whether the case belongs in court or in arbitration, and whether Major Lindsey is entitled to injunctive relief.

The defendants claimed in court papers filed last week that Major Lindsey has dragged its feet in order to keep the case in court instead of going to arbitration. Major Lindsey argued in papers filed on Monday that certain claims belong in court and that it has tried to settle, but that Mahn’s attorney “stormed out” of negotiations.

C’mon, Major Lindsey; you guys are salespeople. Don’t you realize that “storm[ing] out” of negotiation is just a sales tactic?

(And don’t forget: “A-always, B-be, C-closing. Always be closing! Always be closing!”)

As noted in the NLJ article, defendant Sharon Mahn is well-known within the law placement industry. In 2008, she penned a guest column for the New York Law Journal, entitled “The Art of Networking.” In her piece, Mahn wrote: “A significant part of becoming a successful professional is to start building your own Rolodex of names and contact information.”

Indeed.

Major Lindsey Files Racketeering Suit Against Former Director [National Law Journal]
The Art of Networking [New York Law Journal]

DISCLOSURE: MLA has advertised with Above the Law in the past.

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