The Disruptive Lawyer Series: The Deposition Money Pit – Part II

Money PitAs the legal defense industry grapples with cost cutting measures, there are certain measures that can be more effective than others. Sure, holding the line on legal rates and auditing legal bills can result in some savings. That said, the real savings are avoiding and/or controlling larger costs – like the Deposition Money Pit. Here is another example of how the Disruptive Lawyer works hard to avoid depositions at all costs.

The Disruptive Lawyer got a new assignment. It was an E/O claim against Law Firm alleging that while defending its client, A Corp, in a breach of contract, it allegedly advised A Corp to pursue a fraudulent transaction stock sale to avoid paying a very likely judgment in the breach of contract case. The plaintiff later settled the underlying breach claim for about 75% of the judgment with A Corp. The plaintiff then sued Law Firm, seeking the other 25% plus attorney’s fees and punitive damages for the alleged fraudulent transaction.

Of great significance, when settling with A Corp, the plaintiff required a provision in the settlement release that “A Corp owners would not communicate with Law Firm’s lawyers without a subpoena.” The intended purpose was to thwart any meetings between Law Firm’s litigation counsel and A Corp owners without plaintiff’s counsel in attendance. In effect, this agreement required that any discussion between the Disruptive Lawyer and A Corp owners occur only through a deposition subpoena.

Upon receiving the case, the Disruptive Lawyer concluded that this was a case of NO liability. However, all of the evidence to prove Law Firm was not materially involved in the alleged fraudulent transaction was cloaked in attorney client privilege documents and testimony. Given the subpoena settlement provision, the Disruptive Lawyer was being forced to take at least four depositions to prove Law Firm’s case, which would open the Pandora’s Box of discovery (the plaintiff would notice cross-depositions of the defendants) at a cost of at least $40,000. This would not fly with the Disruptive Lawyer.

Why? The Disruptive Lawyer’s goal was not only to win the case, but to do it in a manner that avoided the Deposition Money Pit. So, the strategy focused on how to get around the very expensive effect of the subpoena provision.

The answer was in written discovery. The plaintiff sent Law Firm written discovery. The Disruptive Lawyer responded to virtually every discovery request with “Defendant objects to said request as it seeks attorney client privilege and defendant has not been able to obtain a waiver from A Corp.” The Disruptive Lawyer then called the plaintiff’s attorney to explain he needed to meet with A Corp owners for the limited purpose of securing a waiver so that the discovery responses could be fully answered (and that the subpoena provision seemed unenforceable against public policy). The plaintiff’s counsel reluctantly waived the subpoena provision “for this limited purpose.” In turn, the Disruptive Lawyer met with A Corp owners and obtained affidavits outlining Law Firm’s lack of participation in the transaction.

Next, the Disruptive Lawyer wrote the plaintiff’s counsel a letter using the waived attorney client privileged documents/information to explain in detail why Law Firm had no material part in the alleged fraudulent transaction. This strategy ultimately led to plaintiff filing a dismissal.

The case was dismissed and, equally as important (at least to the Disruptive Lawyer), the Disruptive Lawyer took NO depositions!