A Minnesota business, Rust Consulting Services (“Rust”), has been in the business of “legal administration services” for forty years. That is, it administers class action settlements, regulatory settlements, mass tort settlements, remediation programs, data breach responses, and product recalls.
Schneider Wallace Cottrell Konecky Wotkyns LLP is a California-based “national plaintiffs’ law firm handling complex high-stakes litigation” that hired Rust to perform services for Schneider Wallace relating to certain mass tort actions.
Then, it seems, Schneider Wallace stiffed Rust on invoices totaling $323,756.22 (ALLEGEDLY).
Do law firms consider the reputational impact of lawsuits in which they are named parties (rather than serving as advocates for clients)?
Do they give more or less weight to the reputational impact of being sued than other businesses? Should they give more weight?Less?
They should care more.
First, while some law firms have and cherish reputations for being aggressive and litigious, they are in the minority. Most clients (and vendors to law firms) want problem-solvers, not pinstriped cage-fighters. We all know that some plaintiffs and some defendants (lawyers, law firms, or others) must litigate through no fault of their own, of course, but lawyers and law firms have an extra reputational incentive to avoid the risk.
Second, all things being equal, litigation involving lawyers or law firms as parties will get more interest in the legal community than garden-variety litigation in other industries. For obvious reasons.
Following on the second point, lawyer/law firm litigation will draw not only draw more interest but more legal scrutiny too.
So, turning back to Rust v. Schneider Wallace, what was Schneider Wallace doing, moving to dismiss the complaint for lack of personal jurisdiction? Talk about D.O.A. What a waste of time and money.
And then there are Schneider Wallace’s counterclaims: “negligent misrepresentation,” “tortious interference with business expectancy,” “implied-in-fact contract,” and “breach of the implied covenant of good faith and fair dealing”? The claims, in of themselves are not too wacky but they are unsubstantiated by any of Schneider Wallace’s counterclaims’ factual allegations aside from this: “[Rust] did not perform as promised. [Rust’s] failure to perform resulted in the need for Schneider Wallace’s attorneys and staff to perform, to complete, or to find workarounds for all of the work that RCI did not do…”? This seems half-hearted and, in our view, is not good P.R. for a law firm.
Practice pointer: if your legal practice has the misfortune of being in a lawsuit, recognize the reputational risk and consider upping your game. Because the legal world might be tuning in.
Original post (March 4, 2016): The internet is a roiling and bubbling pool of information and misinformation that humanity is and will be submerged in for the foreseeable future.
One cool thing about professional journalists and lawyer-bloggers, though, is that they wear added layers of regulation and they face professional discipline for disseminating misinformation.
There has been recent discipline of a Minnesota lawyer for making improper statements on a blog (among other things). For journalists, the professional ramifications for lying can and (at least in egregious cases) should be career-ending. Lawyers, too, are wise to ingest daily doses of truth serum when they speak or write to the public, whether in court or out of court.
Why is this a good thing for lawyers and professional journalists bound by professional ethics? In a world struggling to pan for nuggets of valuable (accurate) information, any badge of veracity for particular information-miners is a badge of legitimacy which, in turn, is an advantage (if only a modest one) in trying to be heard over the din and uproar of our information deluge.
Lawyer trustworthiness is also an essential thing for our court system, of course. The system relies on advocates held to a higher standard for truth-telling than average people, who, unfortunately, are all liars. [Previous posts on “Data Darwinism,” by the way, are linked here.]