New Claims Arise From DLA Piper Billing Controversy

Photo by Chris Ratcliffe/Bloomberg

In 2013, several former DLA Piper attorneys made national headlines after a fee dispute with a former client escalated to a lawsuit.

Emails attached to the suit showed then-DLA Piper attorneys speaking about racking up billable hours on a matter for energy executive Adam Victor. One of the lawyers used the words, “Churn that bill, baby!”

Now, the billing controversy is back in the headlines. One of the attorneys on that email chain, Erich Eisenegger, who currently runs a consultancy in Long Island, New York, filed a pro se complaint in the Circuit Court for the City of Baltimore, accusing DLA Piper’s law firm of malpractice.

In a 35-page complaint, Eisenegger accused Kramon & Graham of breaching a duty of care when it turned over about 246,000 pages of documents to Victor in the 2013 fee dispute lawsuit, including the aforementioned email chain.

He specifically accused Kramon & Graham, principal James Ulwick and former principal Kevin Arthur (now a Maryland appellate judge) of committing legal malpractice.

Richard Simpson, a lawyer for the defendants at Wiley Rein, called the complaint “an entirely meritless pro se lawsuit.”

“Kramon & Graham never represented Erich Eisenegger, and there is no basis in law or fact for his claims. We are confident that when the facts are put forward, the lawsuit will be dismissed.”

DLA Piper declined to comment. At the time the emails surfaced, the firm dismissed the matter as “an unfortunate attempt at humor by three former lawyers of the firm” but stressed that no overbilling actually occurred.

Now, Eisenegger paints himself in his complaint as being blind-sided in 2013 when his emails regarding Victor’s bills surfaced in an article on the front page of the New York Times:

“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-changing 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 doesn’t stop there, and goes off in a number of different directions, recapping his time at DLA Piper from 2002 to 2012 and explaining how he had to navigate “shark-infested waters” in the wake of the billing story. Eisenegger was admitted as a partner at DLA in 2011 and specialized in public-private partnerships, as well as bankruptcy and restructuring, according to the complaint. By the time the billing story was published in the New York Times, Eisenegger had left the firm.

Filed on March 18, it was first reported on by Courthouse News on Wednesday. On Thursday, however, the suit could not be found on the docket and a copy of the complaint reviewed by Big Law Business showed it was intended to be filed under seal. The complaint was provided by a source on the condition of anonymity.

In the emails that surfaced in 2013, Eisenegger is quoted as saying, “I hear we are already 200K over our estimate… that’s team DLA!”

In his complaint, Eisenegger — referring to himself in the third person all the way through — contends that far from joking about the matter, he was actually warning his colleagues about a mounting legal bill.

“The context of the exchange did not involve Eisenegger’s callous gloating and joking over padding Victor’s bills — but rather included a factual, legitimate warning about the clients mounting legal bill, derived from Eisenegger’s first hand knowledge that DLA had substantially exceeded its cost estimate to Victor.”

In much of the complaint, Eisenegger focuses on his time at DLA Piper and left the Kramon law firm out of the picture.

At one point in the complaint, Eisenegger writes about DLA Piper’s relationship with the client with whom the fee dispute erupted — energy industry executive Adam Victor. The complaint takes issue with the way DLA checked a possible client conflict process when advising one of Victor’s companies, Project Orange Associates (POA), in a bankruptcy.

“Upon securing Victor’s consent to proceed with DLA as counsel to POA in the bankruptcy, DLA steamrolled through obvious internal conflicts at DLA and commenced work on behalf of POA without allowing their partners to first approach their other clients about obtaining requisite conflict waiver letters. One of the obvious client conflicts was with DLA client General Electric, who was one of POA’s largest creditors… By the time DLA eventually obtained a waiver from GE, DLA had already run up a substantial legal bill.”

Eisenegger said in the complaint DLA was later disqualified from representing POA. He pointed to the judge’s order, which said, “DLA Piper’s representation of GE creates a conflict of interest with the Debtor” and that “DLA’s attorneys have also shown that they are tone-deaf when it comes to conflicts issues.”

It’s unclear whether the rest of the case will ever reach the public.

Eisenegger claims in the complaint that he was a client of Kramon & Graham since DLA Piper contracted with Kramon to provide legal representation. Those services included “partners and former partners who were covered through the (DLA Piper) indemnification clause,” he wrote.

The complaint is seeking a jury and unspecified damages.