Biglaw

Biglaw Firm About To Write A $20 Million+ Check To Their Former Client

Dechert places the blame squarely on their former partner.

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cartoon pair of eyes wowThe roller coaster ride that is Dechert — and its former white-collar crime head, Neil Gerrard — and their former client Eurasian Natural Resources Corporation (“ENRC”) now has a multimillion-dollar (or more precisely pound sterling) price tag.

You may recall the Biglaw firm and Gerrard lost their case in London’s High Court when the judge found they breached their duty to ENRC, and Gerrard treated the billing code as a “cash cow.” Indeed, though he denied it at trial, Gerrard allegedly referred to billing in the case as “rape mode.”

Gerrard was hired by ENRC to investigate a whistleblower complaint about its Kazakhstan operations (the engagement began in December 2010 when Gerrard was at DLA Piper, but the matter moved to Dechert when Gerrard did in April 2011). However, the initial matter they were hired for quickly grew in scope, something Gerrard was largely responsible for.

And the High Court judge in this case, Mr. Justice David Waksman, found Gerrard leaked confidential client information to regulators (and newspapers) in the hopes of expanding the engagement. As one might imagine, the judge did not take kindly to that move, calling it “at least in reckless breach of duty.” Gerrard was “so obsessed with making money from his work that he lost any real sense of objectivity, proportion or indeed loyalty to his client.”

As reported by Roll on Friday, now Dechert has agreed to an *interim* payment of £20 million for costs to ENRC. But their former client wants more than that — they’re seeking indemnity costs because of Dechert and Gerrard’s “aggressive resistance, unreasonable and uncooperative conduct and, most seriously, dishonesty.”

Perhaps correctly, the firm has pushed Gerrard directly under the bus, saying they’ve since “jettisoned” their onetime partner. In a statement on the matter, a spokesperson said, “We recognise the seriousness of the judge’s findings in relation to our former Partner, Neil Gerrard’s conduct. Trust among partners is integral to any partnership, and up to and including the trial, Dechert acted in good faith in reliance on the assurances given to us by Mr. Gerrard.”

But that isn’t holding much water with opposing counsel:

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ENRC’s barrister, Nathan Pillow QC, told the court that Dechert and Gerrard’s defence was “based on lies from start to finish”, according to a report in the Gazette.

“Gerrard and therefore Dechert, vicariously…knew that ENRC’s case was essentially true and that he had committed some of the most serious professional misconduct an officer of this court could commit,” said Pillow.

ENRC’s barrister added that although Dechert has “belatedly parted company with Mr Gerrard…it does not disguise the fact that until June…they were standing shoulder to shoulder.”

Though Dechert and Gerrard are no longer represented together, they’re both arguing against awarding indemnity costs in the case.

Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. 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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