US litigation shop sues recruiter in fee dispute

US litigation leader Quinn Emanuel Urquhart Oliver & Hedges is suing one of America's top legal recruiters in a highly unusual dispute regarding the hiring of two IP partners.

On Tuesday (3 March) Quinn filed a suit in Los Angeles County Superior Court claiming that the consultant Major Lindsey & Africa did not deserve its full invoiced fee for the recruitment of two IP partners from Latham & Watkins.

Quinn, which is representing itself, acknowledges Major Lindsey's role in the firm's effort to recruit one of the partners, David Nelson, a major rainmaker with a client list that includes Symantec, Oracle and Google.

But Quinn downplays the recruiting company's involvement in the move of the other partner, Sean Pak. In the suit, Quinn seeks a declaratory judgment that it is not required to pay a separate placement fee for Pak, or for any other lawyers from Nelson's group who joins Quinn.

Major Lindsey provided the Am Law Litigation Daily with a statement on the law firm's suit. "It is unfortunate that Quinn has chosen this avenue to resolve this matter; however, [Major Lindsey] is confident it has performed the services and is entitled to its fee in this case," said John Cashman, the recruiting firm's regional practice manager, in the statement. "We trust this will be resolved either in court or in conversations between the parties."

Quinn's courtship of Nelson began, according to court documents, when Major Lindsey recruiter Mark Jungers e-mailed Nelson's CV to Quinn Emanuel leaders. Attached to the e-mail was a purported new contract between Major Lindsey and Quinn, which asserted that the law firm would be deemed to have accepted the contract by continuing with the recruiting process.

The new contract did not limit the recruiting firm's fee to a percentage of the compensation of only the first two lawyers of a larger group, unlike Quinn’s standard recruiter arrangement (Major Lindsey's fee, according to Quinn’s filing, amounts to 25% of the initial annual compensation of lawyers it places).

After Nelson and Pak joined Quinn Emanuel in February, according to Quinn Emanuel's complaint, Jungers demanded the 25% fee for both partners. He also suggested Quinn would have to pay a fee for any other attorneys in their group who later joined Quinn Emanuel.

But Quinn Emanuel claims in the complaint that Major Lindsey should not receive any fees for Pak, because it didn't represent him. Quinn Emanuel also asserts that it never assented to Major Lindsey's contract. Partners at the law firm did not return calls seeking comment.

New York-based legal recruiter Marina Sirras, who is president of the National Association of Legal Search Consultants, said that this case provides a textbook example of what can happen when a law firm and recruiter do not explicitly agree on the terms of a placement. "This can become a very sticky issue because you are dealing with extremely high fees," Sirras said. "We are not talking about a $30,000 (£20,100) placement."

The unusual dispute comes as the highly-profitable Quinn continues its push into the London litigation market after securing its UK launch last year with the recruitment of Kirkland & Ellis partner Richard East.

(Published by Legal Week - March 06,2009)