Disco Taps Cooley for Investor Lawsuit After Kiwi Camara Exit

CS Disco Inc. has hired Cooley to defend against a putative class action filed after the ouster of Kiwi Camara, the youngest-ever graduate of Harvard Law School and the legal tech company’s co-founder and former chief executive.

Aric Wu, a complex commercial litigation specialist who joined Cooley as a partner in 2021 from Gibson, Dunn & Crutcher, entered an appearance Dec. 1 for Disco, Camara, and chief financial officer Michael Lafair in the lawsuit filed Sept. 19, court filings show. The complaint accuses the three defendants of misleading investors about Disco’s financial health.

Plaintiffs’ lawyers advising shareholders with claims against Disco are likely interested in what Disco’s board and executives may have known about claims against Camara and what affect they could have had on the company’s business. Camara resigned after the board began investigating allegations that he groped a young female employee, the Wall Street Journal reported Sept. 20.

Camara scuttled what would have been a nearly $110 million pay package with his abrupt exit in mid-September, according to a Disco filing last month.

Disco, Camara, Cooley, Wu, and several of the company’s current and former executives didn’t respond to requests for comment.

Executive Exodus

Cooley helped take Disco public in July 2021 via a listing that generated $1.5 million in legal fees and expenses for the firm, according to a securities filing. Morgan, Lewis & Bockius, where Disco’s Lafair started his career, represented underwriters on the offering. Since that time Disco’s stock has dropped about 80% from its price at the time of its initial public offering.

The Austin, Texas-based electronic discovery software maker has suffered the departure of several key staffers since its stock market debut and is looking to add an associate general counsel to rebuild its in-house legal ranks. Among those who have left are Disco co-founder and former ethics and compliance chief Kent Radford, who started Disco with Camara in 2012.

Of five named executive officers at Disco when it went public, only its finance chief Lafair remains with the company. Three of six key employees identified by Disco in securities filings at the time it went public are also still at the company.

Disco shed roughly 75 staffers at the start of the coronavirus pandemic. The company disclosed this past January that it would cut another 9% of its workforce, or about 62 employees. The most recent layoffs came during a period in which Disco’s financial health was faltering due to the undisclosed loss of key customers, the plaintiffs behind the civil complaint allege.

The company is unveiling new products as it seeks to move beyond Camara.

Disco on Thursday rolled out Cecilia, an artificial intelligence platform that in addition to a chatbot will have features to review legal materials and research cases. In November, the company touted a long-term licensing agreement with vLex LLC to integrate the latter’s large law library with its software.

Culture Concerns

The Journal’s reporting cited anonymous sources at Disco who claimed that Camara presided over a hostile work environment for women. The Journal reported that Cooley initially handled an internal inquiry into Camara’s conduct at Disco before Paul, Weiss, Rifkind, Wharton & Garrison was retained to review the company’s workplace policies and procedures.

A Paul Weiss spokeswoman said that Jeannie Rhee, managing partner of its Washington office and a former federal proseutor, is leading the firm’s work on behalf of Disco.

Camara’s exit came a year after Moneet Kohli, an attorney who was a consultant on enterprise implementation at Disco, filed a discrimination complaint against the company with the US Equal Employment Opportunity Commission. Kohli claimed she was sexually harassed by an employee of Allen Matkins Leck Gamble Mallory & Natsis, a Disco client and Los Angeles-based law firm.

Kohli, who no longer works at Disco, accused the company of perpetuating a hostile work environment for women by failing to address her requests to put distance between herself and an individual from law firm Allen Matkins. Kohli also alleged that Disco retaliated against her with critical job performance reviews and denied her new opportunities.

Allen Matkins didn’t respond to a comment request. Kohli and her lawyer, David Gottlieb of New York’s Wigdor, a firm known for representing people in sex-related employment cases, declined to discuss the dispute. The EEOC, which is prohibited by federal law from discussing complaints and cases that it doesn’t file itself, also declined to comment.

The putative class action case against Disco is Gambrill v. CS Disco, Inc. et al, US District Court, Southern District of New York, 9/19/2023.