March 31, 2010 6:45 PM
Locke Lord Hit with Suit By Former Income Partner
Posted by Brian Baxter
A former nonequity litigation partner at Locke Lord Bissell & Liddell is suing the firm, claiming it stiffed him on interest payments for capital contributions tied to the finalization of the merger between Chicago's Lord, Bissell & Brook and Texas-based Locke Liddell & Sapp in 2007.
In the 13-page civil complaint, filed in Los Angeles County Superior Court last week, Robert Crowder (pictured right) makes allegations against several Locke Lord partners to set up his case against his former firm.
Crowder, who began his legal career at Lord Bissell in 1998 and became an "income" or nonequity partner in 2004, claims the former managing partner of Lord Bissell's L.A. office pressured him to vote for the merger with Locke Liddell. (Mitchell Popham, named by Crowder in his complaint, now runs Locke Lord's L.A. office.)
Crowder's vote in favor of the merger was important, he states in the complaint, because Popham told him that if it didn't go through, Lord Bissell's "continued viability was in doubt." Since Popham had the ability to set compensation for lawyers in the office, Crowder found himself compelled to toe his boss' line.
Popham wanted unanimous approval from Lord Bissell's L.A. lawyers for the merger, Crowder claims, because if it failed, the office might seek to join Locke Liddell anyway as a West Coast outpost for the Texas firm. As part of the proposed merger agreement, income partners were told they would be given an equity stake in the newly combined firm, but would be required to put up capital. Crowder claims Popham told him that junior level partners would be allowed to borrow the necessary amount from Locke Liddell's lender bank.
Announced in May 2007, the merger was finalized that September, with Crowder and other partners voting in favor of it. Crowder states he then borrowed $50,000 from what became Locke Lord's lender bank, which was not named in the complaint, in order to satisfy his capital contribution to the new firm. As a result, Crowder states he became a "participating partner" at Locke Lord, but still wasn't allowed to share in the new firm's profits.
At the time of the merger, many of the details "regarding the roles and responsibilities of junior partners" in the new firm had yet to be worked out, Crowder claims. Participating partners were only told they would receive a form of "guaranteed compensation" at Locke Lord's discretion, which would come through a series of draws and distributions throughout the fiscal year.
At a meeting in January 2008, Locke Lord partners Ken Simon and Neil Dickson, the firm's executive director Miles Holsworth, and the firm's former CFO Mary Anne Jay made presentations via teleconference. During that meeting, Crowder claims he was told that Locke Lord's existing credit facility with its lender bank would allow the firm to make interest payments on the capital for new partners during their first two years of partnership.
If a partner left Locke Lord during that two-year period, Jay said the firm would return capital to the bank if a "departing partner's capital had been borrowed from the bank," according to the complaint. (Jay is now the director of administration at Gardere Wynne Sewell in Houston.)
After Crowder resigned from the firm in September 2009--he doesn't cite a reason for his departure in his complaint--he sent his former employer a letter inquiring about compensation he had yet to receive for his eight months of work at the firm that year. After a series of discussions with Locke Lord's new CFO Robert Johnson, Crowder claims he received a bill from the firm's lender bank requesting payment for unpaid interest and notifying him that the $50,000 in capital had not yet been returned.
Crowder claims Johnson told him no one at Locke Lord ever said the firm "would be making capital loan principal or interest payments to the bank on behalf of partners." Crowder's capital would not be returned to the bank, the complaint states, and Locke Lord demanded he also return thousands of dollars in pay because of a negative balance in his firm "operating account" at the time of his departure.
In sum, Crowder states that Locke Lord deprived him of at least $10,000 by failing to return his capital to the bank and make interest payments. He's seeking an unspecified amount in damages, accusing Locke Lord of breach of contract, violation of the labor code, fraud, negligent misrepresentation, and libel and slander. (The libel complaint stems from another claim by Crowder that Popham made disparaging remarks about him after he left the firm.)
Crowder, now of counsel with L.A. firm Freeman, Freeman & Smiley, declined to comment, saying the complaint spoke for itself. His lawyer, Matthew Kinley of Tredway, Lumsdaine & Doyle, didn't respond to a phone call requesting comment.
A Locke Lord spokeswoman says the firm doesn't comment on personnel issues, but believes Crowder's suit has no merit. Linda Miller Savitt, a name partner at Ballard Rosenberg Golper & Savitt in Glendale, Calif., is representing Locke Lord in the case.
Crowder's suit follows another legal dispute between Locke Lord and a former partner that touched on issues relating to the firm's 2007 merger, which we reported on in December.
Locke Lord has continued growing in recent years. The firm hired 30 former lawyers from IP boutique Morgan & Finnegan in January 2009, even agreeing to take over the bankrupt firm's offices at the World Financial Center in New York. Earlier this year Locke Lord added former U.S. attorneys Tim Johnson in Houston and Paul Coggins in Dallas, where Coggins now chairs the 620-lawyer firm's national white-collar defense and investigations practice.Make a comment