8 Steps to Getting Sued by Blowing Your Client's e-Discovery Budget in a High Stakes Case – Part 2

Like any high-stakes profession, lawyers are vulnerable to the occasional malpractice case. Most often, this is related to claims of missed deadlines, building cases on untenable legal grounds or similar examples of poor judgment. One recent malpractice case instead based its claims on fiscal mismanagement, including nonpayment of e-discovery vendors and other litigation support to an extent so severe as to force the client to settle.

Devon IT, Inc. retained Mitts Milavec to build their case against IBM, claiming a Ponzi scheme (Devon IT, Inc. v. IBM Corp.). Mitts Milavec recommended that Devon arrange with Buford Finance for a litigation loan of $4 million up front in exchange for a percentage of the settlement. Mitts Milavec would receive $2,825,000 of this amount in advance, plus five percent of the settlement.

How Mitts Milavec then proceeded to simultaneously destroy the case and their reputation required eight very specific steps. Here are the last first:

Step 5: Skip Getting Vendor Estimates

Even if the full total of the Buford fund remained, it would not have been sufficient to cover vendor expenses. With over half of that fund already earmarked to Mitts Milavec, full e-discovery payment was impossible, let alone payment to other vendors. Mitts Milavec would have realized this if they’d gotten estimates before quoting a litigation fee, but they skipped over that part.

Step 6:  Pretend Accounting Is Optional

In fact, it seems even Mitts Milavec wasn’t positive where the money went, as they didn’t bother keeping sufficiently detailed accounting records.

Step 7: Dodge Questions About Spending

When questioned, Mitts Milavec never did offer a reasonable explanation regarding the rapid deflation of the Buford fund. Devon stated Mitts Milavec misrepresented their use of funding in all respects.

Step 8: Ask for More Money

Ah, the finishing touch: Even after blowing through the full litigation budget with claims of high vendor costs (but remember, without actually paying any of the vendors), there’s nothing classier than asking for more money to finish the case. Even if by some stretch the first seven steps weren’t enough to get sued for malpractice, this kind of move should seal the deal just fine.

If you would like more information about eDiscovery or how TERIS solutions can assist you, please contact us!

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