Dissolving LeClairRyan Sued in L.A. Over Alleged Contract Breach

LeClairRyan faces a lawsuit alleging nearly $100,000 in unpaid fees, adding to the woes of the Richmond, Va-based firm which is dissolving.

Capital Credits Group, which operates as The Enterprise Zone Company, sued in the Superior Court of California in Los Angeles alleging breach of contract.

The complaint said LeClairRyan failed to satisfy consultant fees for roughly $500,000 in tax credits for its Los Angeles and San Francisco offices.

According to the complaint, LeClairRyan entered into a tax consulting agreement with the Enterprise Zone Company in 2013, authorizing the consultant to identify and obtain tax benefits not claimed with the IRS and the State of California Franchise Tax Board.

LeClairRyan would pay the company 20% of the total amount of tax credits identified and provide it with copies of their ‘Enterprise Zone Deduction and Credit Summary’ for all of the years when tax credits were finalized, the complaint said.

From 2009 until 2014, EZC claimed it identified $416,026 in tax credits for the firm’s Los Angeles office and $73,407 for its San Francisco office, generating $97,886 in fees for EZC. LeClairRyan only paid a fraction of its bill, the lawsuit filed Aug. 9 said.

Lori Thompson, general counsel for LeClairRyan, and its current CEO Erik Gustafson didn’t respond immediately for a request for comment.

LeClairRyan last week announced plans to wind down its operations after years of declining revenues and months of partner departures. The firm, however, must still manage suits like EZC’s and other litigation not related to its collapse.

Former marketing professional Marci Keatts filed suit in July against the firm and ULX Partners, its joint venture with alternative legal services provider UnitedLex, over alleged gender pay discrimination.

In another bias case, Michele Craddock, a former LeClairRyan partner, sued the firm in 2016 for gender discrimination and was awarded $1 million by an arbitration panel in October 2018. But that award was sent back to the arbitrator in June after a district court found that the attorneys’ fees were not calculated properly.

One malpractice case launched by former Health Diagnostic Laboratory Inc. CEO Tonya Mallory was dispatched by a Virginia judge last week, and another in Chicago over claims by RF Technologies appears to be close to settlement.

LeClairRyan attorneys also have found homes elsewhere. On Wednesday, Lewis Brisbois Bisgaard & Smith added an 11-lawyer group from LeClairRyan, including the head of its litigation department Thomas Regan.

K&L Gates announced on Thursday the addition of a four-lawyer team from the firm to its Newark, N.J., office, that includes the head of LeClairRyan’s environmental practice Joseph Lagrotteria.

Clark Hill Strasburger, which has picked up several departing LeClairRyan attorneys in recent weeks, added a five-lawyer group to its Houston office.