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Law Firm Sues for Unpaid Fees, Former Client Sues for Overbilling

September 4, 2012 | Posted in : Fee Dispute, Fee Dispute Litigation / ADR, Unpaid Fees

A recent ABA Journal story, “Ex-Client Sues Firm re ‘Massive Overbilling,’ Partner Says ‘Meritless’ Suit a Bill Dispute Tactic,” reports that a former client has sued a New York-based law firm in federal court for malpractice, accusing Wilk Auslander of “massive overbilling for needless work” while defending several securities.  In the suit (pdf), which was filed in the Central District of California, ex-client Westport Capital Inc. and two individual plaintiffs also accuse the law firm of revealing confidential information related to the representation and harming the defense of the cases by attaching unredacted copies of law firm billing statements to a New York state court suit filed last month.

The Westport Capital plaintiffs say they were not told by Wilk Auslander of the automatic discovery stay that applies to securities class actions.  Instead, they contend, the law firm “pursued at full throttle overblown discovery,” racking up substantial costs even as its clients sought to keep a lid on costs and have the firm perform only reasonably necessary work.

However, name partner Jay Auslander told the ABA Journal in a telephone interview that the law firm and its attorneys had done nothing wrong, had informed its client of the stay and had looked into the facts of a complex securities matter in order to understand the litigation, the appropriate defenses that could be pursued and its settlement value, if any.  “We sued them, and this is surely a tactical response to that litigation,” he said, adding that the $200,000 amount at issue in the New York state court legal bill dispute is very reasonable for this type of representation.