"John Grisham would have struggled to have invented a character as brilliant and unethical as Bill Lerach," says The Wall Street Journal. The lawyer who terrorised corporate America for three decades portraying himself as a gladiator against boardroom chicanery became a national symbol of corruption and greed himself in 2008 when he was jailed for "one of the longest-running legal scams in history".
And he may soon be back in the fray, says the FT. Having spent most of the financial crisis in prison, railing against the institutions he once pursued, he is due for official release this month. A pioneer of the "class action" corporate lawsuit, Lerach and his partner, Mel Weiss, were the heroes of many small investors whose savings and pensions they helped recover. Their targets read like a Who's Who of corporate America, including Goldman Sachs, Enron, and Lerach's particular speciality Silicon Valley. At the peak of their notoriety in the mid-1990s, their firm, Milberg Weiss, commanded 25% of all securities class actions in the US. Profits in 1993 exceeded £100m. By 2004 when the partnership underwent an acrimonious split their "lawsuit factory" had extracted in excess of $45bn from American firms.
Going head-to-head in public with Lerach a "flamboyant, sharp-elbowed showman" was to be avoided at all costs, says Forbes. Of Milberg Weiss's targets, 90% settled out of court. His ability to milk popular sympathy was legendary. "Ever since I saw the pain on my father's face when he told me it how it felt to lose everything in the crash of '29, I've never forgotten that when corporations commit fraud, ordinary people get hurt."
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But his brilliance and Robin Hood persona were "undermined by a fatal tendency to let courtroom enmity spill into his [private] life and vice versa", says the FT. He stopped at nothing in his quest to intimidate. "I'm going to take the diamonds off your wife's fingers," he yelled at one CEO. Bitter executives on the receiving end of multiple lawsuits came to view "getting Lerached" as an occupational hazard. His critics claimed he was running an extortion racket to capitalise on corporate bad luck (see below). "He is lower than pond-scum," declared one beleaguered IT mogul.
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A Pittsburgh native, Lerach, 64, got a law degree at his local university. He looked set for an ordinary enough life as a home town defence lawyer, says The Wall Street Journal. His big break came in the mid-1970s, when he teamed up with Weiss on a $50m lawsuit against real-estate group US Financial. Weiss was so impressed he persuaded Lerach to open Milberg Weiss's first West Coast office. Soon it was outgunning the New York parent.
Lerach had no problem finding corporate targets: the hard part was rustling up plaintiff shareholders. By the late 1990s, the federal authorities were on his trail, alleging he and Weiss had routinely given plaintiffs kickbacks to start lawsuits. The charges stuck, says Fortune, and his downfall looked final. As a convicted criminal, he'll find it hard to practise again. But don't write him off. As he once said of lawyers: "We're like snakes cut us in half and we'll still wiggle."
A tempestuous private life
"Brillo-haired" Lerach's private life was almost as tempestuous as his professional career, notes Fortune. A workaholic who travelled the country in a chartered jet, he used to claim his main exercise was "drinking Scotch". Married four times, even in jail Lerach couldn't resist pushing boundaries, says the FT. He was given 30 days solitary for allegedly trying to sweeten a guard with season football tickets for the San Diego Chargers.
But was Lerach as crooked as his enemies make out? He was certainly "an entrepreneurial economic terrorist", venture capitalist John Doerr told the authors of Circle of Greed a new account of Lerach's exploits. And he stopped at nothing to identify new targets, adds The Independent, "employing a team of legal eagles to comb the financial wires for any unexpected piece of bad news, the sniff of a corporate scandal, a sudden plunge in shares". He would then summon up armies of shareholders and scream investor fraud. Nobody knew until much later that this legal game was often rigged. Lerach was only exposed when one of his "professional plaintiffs" was caught in an unrelated fraud and came clean. Despite posing as "the shareholder's friend", notes The Economist, his frivolous lawsuits "sucked the lifeblood" out of capitalism.
Yet the many individuals whose cash he did recover are surely testament to class actions, says Michael Peel in the FT. It's a pity the British system deters them. "Lerach's chicanery was bad." But the idea that investors in [disgraced companies] should have little or no recourse to the courts "is surely worse".
