Lawsuit Charges Law Firms with Breaching Fiduciary Duty

What would you think if you paid a company to do a job and later discovered that company subcontracted some of the work out to another company which was owned by the same owner?  And furthermore that the subcontracted services (for which you were directly billed) could have been performed by another company for a lower price.  Would you think maybe the owner was being deceitful in not disclosing his/her ownership in both companies and that maybe he/she was profiting from this arrangement at your expense?

Herndon Lawyer Doug Landau would.

That is just what happened recently in New Jersey.  Two law firms, Jacoby & Meyers and Finkelstein & Partners, are being sued for breaching their fiduciary duty to clients by farming support work out to a company owned by current and former partners of the firms.

One current partner and one former partner of the firms are owners of Total Trial Solutions, a company that is hired by law firms to provide litigation support such as legal filing, drafting, editing, etc.

The retainer agreements signed by the two plaintiffs (both represented by Jacoby & Meyers for slip-and-fall cases) did indicate that some of the services provided for their cases might be provided by outside companies.  However, the agreement also stipulated that if the same services were available from another vendor at a lower cost, the firm would give the client the option to choose another company.  Neither plaintiff was given such option.  (Click here to read more about this case.)

Herndon trial lawyer Doug Landau and his firm Abrams Landau, Ltd. do not utilize the services of any wholly or partially owned subsidiaries when working on a case.

In fact, Landau has counseled clients in the past against exactly such a practice.  “Referring clients to a business that you own, and not telling them that you profit from the referral, and not giving them a choice should send up red flags,” notes Landau.  “It’s a clear conflict of interest.”

If you or someone you know is in need of legal counsel for an injury, disability, or workers’ compensation case, email or call Abrams Landau, Ltd. at once (703-796-9555).