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Attorney keeps his head amid downfall of longtime rival
The downfall of powerful plaintiffs lawyer William Lerach, who turned the shareholder class-action lawsuit into a multibillion-dollar legal business, gives Alan Salpeter a measure of satisfaction.
It was Lerach who inspired the unflattering drawing of Salpeter's head on a platter, with Lerach, dressed in a toga looking like Julius Caesar, holding the domed lid, in the October 2005 issue of American Lawyer magazine.
It is not the image that a high-powered corporate litigator like Salpeter would like portrayed to clients. It is also reminder of Lerach's brash style that earned him a lot of enemies throughout corporate America.
But last week the tables, or platters, were turned. Lerach was apologizing for conduct that resulted in his guilty plea in a kickback scheme that paid people to be plaintiffs in lawsuits that he and his former law firm filed. Lerach agreed to pay government fines and penalties of $8 million and will serve at least a year, and no more than two years, in federal prison.
"Look whose head is on a plate now," said Salpeter, who recently joined the Chicago office of LeBoeuf, Lamb, Greene & MacRae after 28 years at Mayer Brown.
Salpeter and Lerach have a long history. While at Mayer Brown, Salpeter represented Lexecon, a Chicago economic consulting firm, in a suit against Lerach and his former firm, Milberg, Weiss, Bershad, Hynes & Lerach. The suit alleged that Lerach and his law partners set out to destroy Lexecon and one of its executives, Daniel Fischel.
Fischel has made a lucrative career as a paid expert witness hired by corporate defendants facing shareholder lawsuits or executives on trial for white-collar crimes. He has testified on behalf of Michael Milken, the junk-bond criminal, and Enron Corp.'s Jeffrey Skilling.
His opinions won him adversaries, including Lerach and his former partners, Salpeter said. In 1990, Milberg sued Fischel in a case related to the savings-and-loan industry, prompting Lexecon's gun-shy corporate clients to flee.
That prompted Fischel to file suit in 1992. After years of fighting, and against all expectations, Lexecon won a mammoth $50 million settlement against Milberg in 1999.
Salpeter came up against Lerach once again in the massive shareholder suit stemming from the Enron collapse that targeted former directors and officers, as well as auditing firms, banks and law firms.
Salpeter was hired by Canadian Imperial Bank of Commerce. The bank ultimately settled for $2.4 billion, the largest amount paid by a defendant, Salpeter said. Lerach refused to let Salpeter participate in the settlement talks, he said. The settlement resulted in a story and the drawing in American Lawyer.
"Everything with him got personal," said Salpeter, who still has a copy of the American Lawyer article.
Lerach could not be reached for comment.
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