SAN FRANCISCO–Attorney William Lerach, the onetime mastermind behind countless fraud-tainted securities class actions, said in an interview before going to prison that the illegal methods he used were common practice.
Mr. Lerach, now serving a two-year federal term for participation in a kickback scheme, justified his unethical conduct in a video presented at the PLUS International conference here Wednesday where legal actions resulting in directors and officers liability claims are a topic.
Mr. Lerach said, in the video titled "The Rise And Fall of William Lerach," that the illegal sharing of fees with persons who agreed to serve as named plaintiffs for class action lawsuits "was an industry practice."
"It went on. Anyone who says otherwise isn't telling the truth," he said in the video.
"We were not voluntarily giving away a part of our legal fees because we wanted to. We weren't a church or a charity. We were a profit-making institution. We did it to beat the competition. We did it because that's what was done in the field," he said.
Further justifying his actions, he said: "You have to make a judgment. Do you want meritorious cases to be brought and litigated, or not? If they're not brought, and the plaintiff isn't compensated for bringing them, then justice will not be done. Wrongdoers will not be held accountable. Victims will not be compensated."
John Degnan, vice chairman and chief operating officer of The Chubb Corporation, who received the PLUS1 Award at the meeting in honor of his efforts to advance the image of the professional liability industry, said during a video excerpt, "Bill Lerach had nothing to do with the cleanup of corporate behavior."
There were clearly some cases of real corporate abuse prior to 2002, but that "does not justify criminal behavior by a lawyer who cloaks himself in the posture of a reformer, when in reality he's simply using that wrongdoing to benefit himself," Mr. Degnan said.
Mr. Lerach, at a later point in the video, said, "Sometimes you have to endure things that aren't great if you think there's a greater good. It may have been the ends justify the means.
"It may with the benefit of hindsight seem stupid or reckless. But when it was going on, nobody–and I mean nobody–ever thought what was going on was criminal in any way."
Admitting that he and other members of his firm knew it was "ethically improper," he also gave his views of ethical rules.
"The fact of the matter is that ethical rules are written by lawyers at big law firms, and judges who came from big law firms–and they're written to create a legal environment that protects powerful interests. It's that simple"
"Legal rules exist to protect the rich and powerful in society. We were up against that," he said.
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