In his heyday, Bill Lerach was so ruthless a class-action lawyer that in Silicon Valley his name was synonymous with being sued. Now Lerach is being "Lerached" himself — to the great delight of much of the corporate community. That community will be less than thrilled with his sentence.
In September, the former Enron lead plaintiffs' attorney pleaded guilty to conspiracy to obstruct justice, acknowledging that he and others at his former law firm, Milberg Weiss Bershad Hynes & Lerach, secretly paid plaintiff s in some of the 150 shareholder lawsuits the firm waged. Co-founder Melvyn Weiss has also been indicted in the seven-year federal investigation into a scheme that supposedly netted more than $250 million in fees.
It is a dramatic turn for Lerach, who had formed his own San Diego–based law firm, Lerach Coughlin Stoia Geller Rudman & Robbins. His sentence of between one and two years in prison, along with a fine and forfeiture totaling $8 million, however, comes with a caveat: he won't have to cooperate in the continuing investigation.
"His plea agreement is fairly unique," says Columbia University law professor John Coffee. "I haven't seen one [since Enron] in which the defendant is not required to cooperate with the investigation." And it hardly compares to the multiple-decade jail terms of the executives he has sued in the past — or to the 40 years his former boss and mentor Mel Weiss might face.