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DLA Piper's Bill-Churning Debacle Quietly Settles

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By William Peacock, Esq. on April 22, 2013 1:08 PM

Late last week, the biggest BigLaw billing dispute in recent memory came to an anti-climactic conclusion with a confidential settlement, reports Reuters. The motivation to settle is certainly understandable. Though an unpaid $675,000 tab is quite a bit of bucks, and compromising on the bill sets a bit of a dangerous precedent, the cost of the negative publicity to DLA Piper was more significant.

For those not familiar with the semi-scandal, DLA Piper sued TransGas over the unpaid balance. The company’s CEO and long-time DLA Piper client, Adam Victor, countersued, alleging overbilling. The discovery process led to evidence that supported Victor’s claims and embarrassed the BigLaw behemoth.

We won't recap the emails in full, but the tone of the emails was an inappropriate mocking of the firm's billing practices ("churn that bill, baby!") and though the tone certainly sounded sarcastic, the text of the emails made DLA Piper the temporary scapegoat for BigLaw over-billing and drew further attention to the practice of training associates on the client's dime.

The firm, meanwhile, assured the public that emails were inappropriate attempts at humor by attorneys no longer working at the firm. The firm's memo on the matter stated:

"It is unfortunate that the unprofessional behavior of these lawyers by writing those emails has distracted attention away from the fact that a client refused to pay his bills, and is now being exploited by a party in litigation for their own advantage."

They may have been correct. Either way, the smart decision was to settle and put the controversy behind them. $675,000 may sound like a lot, but to a BigLaw firm, it isn't exactly a bank-buster, especially considering the cost of assigning lawyers to the case and the PR hit from the embarrassing emails.

It's a reality of litigation: whether you are a small business, BigLaw firm, or in-house counsel, you've got to weigh the cost of fighting the good fight against the principles underlying the lawsuit. Sometimes, the truism about juice and squeezing rings true.

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