2 Big Firms Stiffed $800,000 by Same Client
Maybe lighting does strike twice.
Using excuses that included his house was struck by lightning, a client struck two big law firms with more than $800,000 in unpaid attorney's fees. What really shocked the lawyers, however, was that one firm unwittingly vouched for the client to the other firm.
Too Good to Be True
James P. McLean Jr. was "a very convincing fraudster," according to Thomas Buchanan, the managing partner and head of litigation for Winston & Strawn's Washington, D.C. office. McLean cleaned them out of $500,000 in unpaid bills, and left DLA Piper holding a $300,000 bag.
McLean, who has been sued by Winston & Strawn but not DLA Piper for the unpaid fees, claimed in a deposition that DLA Piper lawyers worked on mortgages for him. That same unpaid firm allegedly referred McLean to Buchanan. Buchanan said that DLA was supposedly handling a transaction for McLean, and he was "getting a large return from which he was going to pay us."
"In addition, he was married into a wealthy family, although as it turns out the money had run out," Buchanan told the National Law Journal.
It's likely that McClean was broke too. In court papers, he gave an address for a three-bedroom condo in Georgetown, South Carolina. It was foreclosed on and sold for $56,000 in October, according to real estate website Estately.
Fool Me Twice or More
McLean had offered many excuses for his unpaid bills, and some were almost plausible: a wire transfer was coming from overseas and would take a few days; the bank was not open on Fridays in Abu Dhabi; if it didn't close that week, he would fly there and wire the money directly. Three months later, the excuses were not so convincing.
"Since my house was hit by lightning I lost your bill and wiring instructions when the computers were fried," McLean emailed. "Please resend. I am expecting overseas money anytime."
For Buchanan, who entered private practice in 1984, it was the first time he had been led down the garden path so far by a client. And for a former federal prosecutor, that's saying something.
Related Sources:
- How a Problem Client Stuck Two Am Law 100 Firms With His Unpaid Bills (National Law Journal)
- A 'Taxing' Way to Get Back at Deadbeat Clients (FindLaw's Strategist)
- Handling Client Fee Arrangements -- Ethically (FindLaw's Strategist)