Not Everyone Lerachs

Earlier this month, a prominent former class action attorney, William Lerach, was sentenced to two years in prison for his role in a scheme to pay huge cash kickbacks to class action plaintiffs. It was the maximum sentence possible under his guilty plea agreement. He'll pay about $8 million in fines, too. The thing that struck us about his case was the assertion that Lerach's kickback scheme was widespread among all class action lawyers. Lerach has been quoted saying:

"Believe me, it was industry practice. We kept it quiet because obviously if a judge knew about it you're not going to get appointed as lead counsel and the class representative is not going to get certified because it's an ethical violation and you're not allowed to split a fee with a non-lawyer."

An industry practice? It's not an industry practice. Basically, it's capping. Some lawyers need to do it to get the cases they want, but not everyone is doing it. Most are not, which is why most of us only have a handful of these cases at a time.

It's like cheating on your wife. If you do it, your brain feels better if you convince yourself that everyone does it, even though we don't. Have you ever met a cheater who didn't think everyone else was doing it, too? It reminds us of an expression our grandfather used to say. We can't repeat verbatim because he said it in French, but it translates like this: "No man ever looks under the bed unless he has hidden there himself." Lerach thinks we're all hiding under the bed.