August 10, 2011 5:21 PM
Former Stroock Partner Sues Firm Over Retirement Benefits
Posted by Sara Randazzo
Correction, 8/10/11, 5:55 p.m. EDT. The original version of this story referred incorrectly to whether Stroock had been served with Michael Perlis's complaint as of Wednesday. That information has been corrected in the seventh paragraph below. We regret the error.
A prominent Los Angeles securities litigator is suing his longtime former firm, Stroock & Stroock & Lavan, for allegedly denying him retirement benefits to which he believes he is entitled.
Michael Perlis filed the suit in Los Angeles Superior Court on August 5, just two weeks after he jumped from Stroock to Locke Lord Bissell & Liddell with five other attorneys.
Perlis's two-page complaint sheds little light on the basis for his claim, stating simply that “Perlis contends that he is entitled to certain retirement benefits and Stroock disputes this contention and contends that Perlis is not entitled to said retirement benefits.”
The complaint notes that the 64-year-old Perlis—who seeks declaratory relief and a jury trial—was in the partnership for more than 20 years and had vested retirement benefits dictated by a written agreement. That agreement is not attached to the complaint, nor are any other documents.
Perlis spent six-and-a-half years in the Securities and Exchange Commission’s enforcement division before entering private practice, first with now-defunct Pettit & Martin and later with Stroock, according to a Locke Lord press release. His practice has focused on securities litigation since leaving the SEC, including defense work on class actions, derivative actions, and SEC investigations and proceedings, representing directors, officers, corporations and accountants.
Reached Wednesday, Perlis declined to comment on the suit. His attorney, Brownstein Hyatt Farber Schreck shareholder Barry Langberg—who was until 2009 Perlis’s colleague at Stroock—did not return a call seeking comment. The suit is a departure for Langberg, a defamation and First Amendment specialist whose past clients including Carol Burnett, Rodney Dangerfield, and Aretha Franklin.
Stroock spokesman Jim Ponichtera said in an e-mail that the firm has not been served with the complaint and has no comment at this time.
Employment experts unfamiliar with the details of Stroock policies say it is rare for a dispute over retirement benefits to wind up in court, since most law firm partnership agreements include an arbitration clause.
Arthur Ciampi, a New York lawyer and the author of a treatise on law firm partnership agreements, says he has seen an uptick in benefits complaints by retiring partners in recent years, though few land in court.
Mandatory retirement ages, which are typically set between 65 and 70, are often at the heart of such disputes, Ciampi says. Though the American Bar Association recommended in 2007 that firms eliminate mandatory retirement policies, many firms still require older partners to wind down their practices, according to sibling publication New York Law Journal. Kelley Drye & Warren dropped its policy of deequitizing partners and reducing their pay when they hit 70 after the Equal Employment Opportunity Commission brought a lawsuit--now pending in New York federal court--against the firm.
(There is no indication that Stroock has a mandatory retirement policy. Interestingly, the same NYLJ article that discussed the ABA recommendation cites the example of a partner joining Stroock after being forced to retire from another firm.)
While state ethics rules typically prohibit restrictive covenants in law firm partnership agreements, partners who retire from one firm and join another can be forced to forfeit retirement benefits, according to Robert Hillman, a professor at UC Davis School of Law and expert on partnership law.
Without commenting on Stroock specifically, Hillman says more firms are starting to add such provisions to their partnership agreements. “It’s the only thing they can hang over you,” Hillman says, adding that some firms are actually broadening the definition of "retirement benefits" as a way of preventing partners from leaving.Make a comment