Former DLA Partner Slams Email Release as Careless

BALTIMORE (CN) - DLA Piper barely flinched when litigation revealed its lawyers joking about overbilling clients, but one attorney claims in court that the scandal destroyed his hard-built reputation.

The scandal erupted from a 2012 billing dispute between the firm and former executive client Adam Victor. When DLA went after Victor for nonpayment, Victor hit back with a counterclaim for rampant overbilling.

Media outlets around the world took notice when the ensuing discovery exposed internal communications from DLA in which its attorneys emailed gleefully about the Victor's soaring tab.

"Churn the bill, baby," said one email. "That bill shall know no limits."

A former DLA partner caught in the crossfire filed suit Friday in circuit court against the outside counsel whom he blames for letting the reputation-damaging emails out.

Erich Eisenegger, of Long Island, N.Y., says he was in his first year at another firm, McDermott Will & Emery, when the internal DLA emails came to light in 2013.

Though hoping DLA's outside counsel with Kramon & Graham "would competently represent him" in the Victor fee litigation, Eisenegger says the Baltimore firm's "handling of the discovery ... was marred by a series of costly errors steeped in gross negligence."

Kramon and & Graham have not returned requests for comment.

Eisenegger says the firm's missteps damaged both DLA's chance of success in the Victor litigation and the firm's reputation, according to the complaint.

"Unlike DLA, however, whose size and multi-billion dollar brand was well equipped to continue and thrive after the embarrassing results of the discovery errors, Eisenegger's singular profession reputation was destroyed," the complaint continues.

Eisenegger complains that Kramon breached rules of professional conduct in releasing "no less than 246,019 pages of unreviewed, unredacted documents which had not been reviewed for privilege, relevance, confidentiality, or any other basis for justifiably withholding or redacting the document."

Had Kramon reviewed the documents, Eisenegger notes, DLA could have reassessed its strategy in the case against Victor to reach a settlement that would have forestalled any undue embarrassment.

Kramon's hasty disclosure also went against its ethical obligation to notify Eisenegger as an extension of its client, DLA, according to the complaint.

"Not only was Eisenegger never contacted regarding the production of the emails at issue here before they were produced to Victor and Victor's counsel completely unmolested, without any redactions, and without a protective order or stamp demarking the production as confidential, but even after such negligence was committed, and Kramon became aware of the life-chancing negligence it had committed, Kramon continued to keep Eisenegger in the dark for several weeks about the negligence until only after it became clear to them that their negligence would lead to a front-page story in the New York Times," the complaint states.

The unredacted emails looked bad, but Eisenegger says his was "part of a much more thoughtful and serious discussion amongst associates and a DLA partner about DLA's billing habits and professional lapses on ... [Victor's original] case."

Eisenegger says his email - "I hear we are already 200k over our estimate....that's Team DLA!" - was meant as a warning.

With Victors' attorney seizing on the emails to support his overbilling counterclaim, Kramon partner James Ulwick assured Kramon partner James Ulwick assured that the firm would file a "sharp response through the courts," according to the complaint.

Eisenegger says DLA instead issued a press release "slamming its 'former attorneys' ... in order to divert attention away from the more problematic DLA professional lapses regarding the handling of the POA bankruptcy [Victor's original case] and other mounting billing issues at DLA."

In the aftermath, several of Eisenegger's clients and peers said they "believed Eisenegger had been terminated from DLA because of the emails and his association with the POA bankruptcy matter," the complaint states.

Eisenegger says his new employers at McDermott terminated him soon thereafter, saying he had "lost clients, pitch opportunities, the trust of his partners, and was unable to recover emotionally or professionally from his experience with the article and media frenzy."

Eisenegger, who is representing himself in the litigation, did not return a call seeking comment.

Joining Kramon & Graham as co-defendants to the lawsuit are Ulwick and fellow partner Kevin Arthur.

Eisenegger seeks punitive damages for legal malpractice and breach of fiduciary duty.

DLA, which reported $2.48 billion in revenue for 2014, is not a party to the action, nor is its erstwhile client, Victor.

The New York Times reported that DLA settled the fee litigation with Victor less than a month after its initial article on the email disclosures.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit