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Law Firm Milberg Weiss Planning to Split in 2

June 12, 2003|From Bloomberg News

Milberg Weiss Bershad Hynes & Lerach, the biggest law firm representing investors in fraud suits, has decided to split in two because it has grown too large to be managed efficiently, senior partners said Wednesday.

The decision came in the last three days to divide the firm into two entities, to be based in New York and San Diego, said partner William S. Lerach, who heads the San Diego office. Partners must agree on how to handle pending fees and cases, leases and malpractice insurance policies, he said. The firm employs 205 lawyers in eight cities.

As two firms, Milberg Weiss may emerge as a more efficient adversary of public companies sued for securities fraud, lawyers said. The firm has filed such suits on behalf of investors in Enron Corp., WorldCom Inc., Global Crossing Ltd., Tyco International Ltd., Martha Stewart Living Omnimedia Inc. and Freddie Mac.

Milberg Weiss grew from 163 lawyers in 2001 to 205 attorneys in 2002, according to a survey by the National Law Journal.

"The mechanics are very complex," said Melvyn I. Weiss, who leads the New York office. "There's never been a firm in the history of the world that works on contingent fees that's even the size of half of us," he said, referring to fees lawyers earn only if they win or settle, based on a percentage of a client's recovery.

Milberg Weiss represented investors in half the settlements of fraud suits since 1995, according to a study published by the Stanford Law School Securities Class Action Clearinghouse last year. Court records show the firm has filed at least 105 securities lawsuits so far this year.

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