Lethal Blow to Balch & Bingham?
No general counsel or government attorney can justify hiring Balch & Bingham any longer because the firm appears to be a third-party risk.
The decision by the Alabama Supreme Court two weeks ago declaring that Balch & Bingham will stand trial for fraud in ex-Drummond executive David Roberson’s $75 million civil lawsuit appears to be a lethal blow to the once-prestigious, silk-stocking law firm.
The Alabama Supreme Court noted in its decision that the embattled law firm argued that “Balch had owed no duty to Roberson because Drummond, not Roberson, was Balch’s client.”
The Supreme Court concluded:
For the purposes of this appeal, the following facts must therefore
be taken as true:
(1) Roberson is not a client of Balch.
(2) Roberson never asked Gilbert for an opinion on the legality of his
conduct.
(3) Roberson asked Gilbert if certain attorneys employed by Balch
had rendered an opinion on the legality of his conduct.
(4) Balch never rendered an opinion on the legality of Roberson’s
conduct.
(5) Gilbert lied about the existence of a favorable opinion having
been reached by such attorneys.
(6) Gilbert accepted a check for $5,000 from Drummond, Roberson’s
employer, which Roberson approved and which was payable to Balch, for
the purpose of a fund-raising campaign to purchase “winter coats for kids,”
and Gilbert, without the knowledge of Roberson, had agreed that
Oliver Robinson, a member of the Alabama Legislature, could keep half
the proceeds of the check.
During the course of the Roberson appellate proceedings, Balch declared that the firm:
- “owed no duty” to tell the truth to a client’s representative and
- had the audacity to say lying to or misleading someone is a legal service
Both foolish arguments without a doubt have made Balch a third-party risk.
Observers appear to agree that the third-party risk of Balch looks like it will impact their clients that are heavily regulated. Shareholders and institutional investors are demanding the highest adherence to legal compliance and social responsibility, while frowning on any kind of third-party risk.
No general counsel or government attorney can justify hiring Balch & Bingham any longer because the firm appears to be a third-party risk.
If you hire Balch, you could be misled or lied to and could end up in federal prison like David Roberson.
Balch lies to a client’s representative and appears to say it is justified because the firm owes no duty to the executive, only the entity he works for.
Balch lies and says in open court that misleading someone or lying is a legal service.
The absurdity and sheer stupidity of Balch’s arguments were shredded and gutted in the Alabama Supreme Court decision. (Read the entire decision by clicking here.)
Even Southern Company, Balch’s top client and parent company of Balch’s sister-wife siamese-twin Alabama Power, has compliance rules that state:
We also expect our suppliers/contractors, in their work with us, to conduct themselves with honesty, integrity, fairness and a commitment to legal compliance. Suppliers/contractors are expected to comply with all applicable laws and regulations and certain Southern Company policies….
And now who is waiting in the wings?
Balch’s competitors.
The vultures and wolves smell blood and are salivating for every sweet morsel of Balch’s current clients as well as any seasoned Balch partner, attorney, or staff member that currently works at the embattled law firm and is ready to head to the emergency exit.
The exodus and hemorrhaging begins.
