Patton Boggs Issues Flurry of Fee Suits
The financially stressed firm has filed four lawsuits since June, seeking $2 million.
Patton Boggs is putting a tighter squeeze on clients to pay their bills on time as the firm continues cost-cutting measures and entertains a potential merger. At the same time, the firm is suing to collect unpaid bills, filing the latest lawsuit this month in a series of fee disputes in Washington-area courts.
Big law firms don't often take fee fights to court. But since June, Patton Boggs has filed four lawsuits in District of Columbia and Virginia courts seeking nearly $2 million. The firm's general counsel, Charles Talisman, acknowledged it was rare for a law firm to sue a client.
"The ethical rules require that we exhaust all other possibilities before we bring a case against a client," Talisman said. "We do our best to follow that."
Separate from the litigation, Talisman said Patton Boggs was tightening up its billing practices after a "poor collection year" in 2012. For example, most new clients were paying bills within about 45 days — a quick turnaround, he said. "We've made conscious efforts to get our bills out more quickly, to be a bit more conscientious about following up with clients if they're late in paying."
Patton Boggs, Talisman said, was "more focused now on making sure our clients pay their bills than perhaps we were in the past." However, he said, the recent spate of litigation did not reflect a change in the firm's policies on when to sue clients over alleged unpaid invoices.
The nearly $2 million at stake in the suits filed this year is relatively small compared with the firm's bottom line, representing less than 1 percent of the $317.5 million in gross revenue earned during 2012, according to NLJ affiliate The American Lawyer.
Patton Boggs has struggled financially in recent years. Gross revenue dropped by 6.5 percent between 2011 and 2012, according to The American Lawyer. On Nov. 14, the firm announced its second round of layoffs this year — 10 lawyers and 35 staff members. The firm last week confirmed it is in merger talks with Locke Lord, The Am Law Daily reported.
Talisman said the lawsuits were unrelated to recent cost-cutting measures and merger discussions. "We would have brought these cases regardless of the year we were having, whether it was a great year or a poor one," he said.
Patton Boggs' latest bout of litigation began on June 24, when the firm sued former client Keystone Global Co. Ltd. in D.C. Superior Court. The firm unsuccessfully tried to have the lawsuit sealed, citing concerns about disclosure of protected or sensitive information. It claimed Keystone owed more than $925,000.
A judge dismissed the case in August, citing rules requiring plaintiffs to serve defendants within a certain period of time. Patton Boggs refiled the lawsuit on Sept. 27. Keystone did not list a lawyer of record and attempts to reach the company were unsuccessful.