Biglaw

Lawsuit Alleges Biglaw Firm Failed To Monitor Partner With Substance Abuse Problem

The partner is also facing charges of impaired driving causing death after a hit-and-run incident left a 16-year-old girl dead.

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The Biglaw firm of Dentons is facing a $25 million lawsuit alleging self dealing, conflict of interest, and gross overbilling. The case, filed last week in Calgary, was brought by Laurie Venning and the Venning Group of companies. They alleged that Venning paid Dentons $22 million for legal services and ~$12 million in disbursements since 2010, with $7.4 million of the fees for the period of time surrounding Venning’s 2014 sale of Regent Energy to a private equity firm.

As reported by CBC News, the lawsuit alleges that both Dentons and partner Shane Stevenson told Venning that “within a short period of time” of the Regent Energy sale, Stevenson would come in-house at Venning Group. While that move never materialized, the complaint alleges that in anticipation of the move, Stevenson became involved as a shareholder or director in numerous of its companies. That’s when Venning alleges the self-dealing and conflicts of interest began:

“Dentons and Stevenson represented to [Venning] that it was standard industry practice to grant legal counsel with equity participation in the companies for whom they acted,” the lawsuit states.

Stevenson eventually became involved in 22 of Venning’s companies or trusts, and the lawsuit claims that Stevenson issued shares in several companies to himself, including some instances “without the knowledge or consent of the plaintiffs.”

Venning claims that Dentons never recommended he get independent legal advice in relation to these transactions, “despite the conflicts of interest that necessarily resulted, and despite the fact that some or all of these transactions were not fair and reasonable to the Venning Group.”

Additionally, the complaint alleges that Stevenson has a substance abuse problem and that Dentons was aware of the issue and failed to provide proper supervision of his legal work. The allegations against Stevenson include ones that he provided legal advice under the influence of alcohol and cocaine and that Venning was not warned the legal work they got from Stevenson may be under the influence:

The lawsuit alleges Dentons failed “to ensure its partners were properly serving the Venning Group, in light of Stevenson’s ongoing substance abuse issues, despite their knowledge including having sent Stevenson to multiple stays in a rehabilitation facility and that Stevenson’s substance abuse was re-emerging in an alarming manner.

“Stevenson was providing advice to the Venning Group while under the influence of intoxicants and narcotics including alcohol and cocaine,” the lawsuit states, adding that Dentons owed a duty to Venning to monitor the work Stevenson was doing for Venning “given Stevenson’s known substance abuse history.

“[Dentons] were aware at all times that Stevenson had a heightened risk to relapse, but failed to monitor the advice he was giving, and failed to warn [Venning] they should not rely upon Stevenson’s advice,” the lawsuit states.

A Dentons spokesperson had the following statement about the lawsuit: “[N]othing means more to us than the integrity of our lawyers and the trust our clients have in Dentons. We intend to mount a vigorous defen[s]e to these allegations.”

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Stevenson’s had issues with substances before. In 2009, he was charged with two separate incidents of impaired driving. Those charges were later dropped. Then, in 2018, he was arrested on charges of drunk driving that resulted in the death of a 16-year-old girl. According to police, he had a blood-alcohol level over .08 at the time of his arrest. His trial on those charges is currently scheduled for October.

headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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