According to court filings reported on by Richmond BizSense, the Biglaw firm of LeClairRyan is paying over $20 million dollars — $20.37 million, to be exact — to settle claims with the trustee of the now bankrupt Health Diagnostic Laboratory (HDL) surrounding the firm’s representation of HDL.
While there is a good deal of confidentiality surrounding the settlement, BizSense has done the digging to suggest the HDL trustee was pursuing malpractice claims against the firm:
The settlement agreement, filed in Richmond federal court on Sept. 1, does not provide exact detail of the claims the trustee had made against LeClairRyan. But BizSense reported last month that passages in the thousands of pages of previous court documents show the trustee’s camp was pursuing malpractice claims related to the law firm’s representation of HDL from its inception in 2008 and into 2015.
Take Control Of Your Firm’s Finances With Tools Built For Success
Position your firm for long-term growth with better financial visibility and control. Learn how to track performance, manage spending, and plan strategically—download the full e-book now.
The blood testing company declared bankruptcy in 2015, after the federal government began investigating whether various “fees” HDL paid out to doctors were actually kickbacks.
According to a firm statement, post-settlement LeClairRyan is moving forward, and it is not admitting any wrongdoing:
Bruce Matson, LeClairRyan’s chief legal officer, said in a prepared statement that the firm looks forward to putting the case behind it.
“As stated in the settlement, we do not believe LeClairRyan is responsible for the actions that led to the government investigation or bankruptcy of HDL,” Matson said. “We believe we provided sound legal counsel to the company at all times during our engagements based upon the issues and information shared with our legal team by HDL.” ….
Maintaining that LeClairRyan believes it did nothing wrong related to HDL, Matson said in his prepared statement that settling was in the firm and HDL’s best interest.
“Unfortunately, in bankruptcy cases of this nature, it’s quite common for professional firms providing advice from time to time to such companies to be pulled into the bankruptcy case,” Matson said. “Unfortunately, the pursuit of litigation claims against law firms has become quite commonplace as one of the ways trustees try to raise funds to pay off claimants in bankruptcy cases.”
While the claims against the firm are a thing of the past, the same cannot be said for possible claims against former name partner Dennis Ryan, who may still be embroiled in litigation surrounding HDL’s bankruptcy:
Calculate Your Firm’s Time-Saving Potential
Want more time for what matters most? MyCase streamlines your firm so you can focus on winning cases. See how much time you could save with our Law Firm Time Savings Calculator—try it now!
LeClairRyan namesake and cofounder Dennis Ryan isn’t off the hook. The settlement document specifically preserves the trustee’s right to pursue claims against Ryan, who represented HDL in its early years while still at the law firm, ultimately leaving the firm in March of 2012 to join the then-booming downtown lab company.
With a $20 million payout on the horizon, the firm must be very glad to be done with this lawsuit.
LeClairRyan to pay $20M to settle HDL inquiry [Richmond BizSense]
Kathryn Rubino is an editor at Above the Law. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).