Jones Walker announced today that its merger with Watkins Ludlam (“WLS”) was effective on Friday. That will not stop the endless local speculation about the lawsuit filed against WLS and the seven WLS partners who led the negotiations with Jones Walker.
When talking about this lawsuit, many people talk about the unusual nature the Jones Walker– WLS merger. What lawyers expect to see in this situation is one of two things. One common scenario is when the larger firm (Jones Walker in this case) cherry-picks select lawyers from an existing firm to start a local office. That is what happened when Baker Donelson cherry-picked WLS lawyers to start the Baker Donelson Jackson office in 1995. But there are many other examples of this happening.
The second common scenario is for the larger firm to take all of the existing firms’ lawyers and then weed-out the ones who it does not want over the next few years. Doing it that way would probably prevent a lawsuit like this, be better politically and give the firm time to evaluate which lawyers are worth keeping. A lot of people still expect to see this happen at the former WLS over the next couple of years.
Word on the street is that Jones Walker made WLS terminate a certain number of lawyers before the merger. I’m not that familiar with WLS. But one criticism I’ve heard is that WLS terminated laterals with superior numbers at the expense of poorer-performing lawyers who were at WLS their entire careers. People supporting this contention point out that the plaintiffs (Hall Bailey and Vikki Taylor) where both laterals. If true, this suggests a politicization of the culling process that will be hotly-debated in the lawsuit.
Regardless of the opinion lawyers hold about the prospects of the lawsuit, most seem to be scratching their heads about why Jones Walker decided to merge with WLS the way it did. At this point, you can’t yet say that Jones Walker avoided getting sued. The plaintiffs in the Bailey v. WLS case will undoubtedly conduct discovery of email between the WLS defendants and Jones Walker attorneys. If the plaintiffs find evidence to support a claim against Jones Walker, then they are likely to amend the complaint to name Jones Walker as a defendant.
Opinions on the prospects of the lawsuit differ. Defense lawyers seem to like the plaintiff’s case more than plaintiff lawyers. Defense lawyers focus on the factual allegations and more naturally conclude that the plaintiffs were screwed by WLS. Plaintiff lawyers tend to focus on the entire case and question how the plaintiffs will prove damages.
I believe that this difference in focus is attributable to the fact that defense lawyers practice in the firm environment and believe that their job is secure even if they have some bad years number-wise. Even defense lawyers without their own book of business feel like they have a lot of security in their job.
Conversely, plaintiff lawyers typically practice alone or in small groups and view their job as having very little security. “Sure I just settled a case”, the plaintiff lawyer thinks, “but I may never make another dime.” Fear is the constant companion of plaintiff lawyers. Many defense lawyers, on the other hand, are not fearful about their job security even when they should be.
Personally, I still think that the case boils down to the allegations in paragraph 39 of the Complaint that the individual defendants negotiated sweet-heart deals for themselves at the expense of other WLS partners. If the plaintiffs can prove this, then the case is factually viable. But damages are a separate issue that will be hotly contested even if plaintiffs win on liability.
One thing I don’t expect is a quick settlement. Very few cases settle quickly in today’s litigation environment. And lawyers who are defendants are less likely to settle quickly than others. That might be counter-intuitive. But its true.