Law Times

November 29, 2010

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STORE & SHRED Exceptional Quality at Reasonable Prices! COPY, SCAN, Call us today to fi nd out how much you can Save. TF: 1.888.781.9083 $4.00 • Vol. 21, No. 38 ocdavit_LT_June7_10.indd 1 6/4/10 9:22:44 AM Covering Ontario's Legal Scene ntitled-3 1 Hamlet-like battle at Toronto firm Lawyers' departures prompt flurry of litigation over fees BY MICHAEL McKIERNAN Law Times were "unjustly enriched" by the transfer of contingency fee fi les when they started up their own practice. In a statement of claim fi led A on Aug. 17, Frank Loreto asks for $3 million in damages related to more than 200 personal injury cases transferred from his fi rm, Loreto Little Morello, to Little Morello Vettese Segreto LLP. Th e new fi rm was formed by Ian Lit- tle, Dianna Morello, John Vettese, and Piera Segreto, the lawyers who ran the personal injury practice at Loreto Little Morello that gener- ated about 95 per cent of the bill- ings there. Th e lawsuit, which also names four law clerks who jumped ship to the new fi rm as defendants, is just the latest salvo in an increas- ingly bitter battle between the par- ties since their acrimonious split in the summer of 2008. Superior Court Justice Edward Belobaba has already dismissed a claim by Loreto that the four lawyers breached their fi duciary duty to him when they approached clients on behalf of the new fi rm. Many of the fi les have paid out handsome Toronto lawyer is suing four of his former associ- ates in a case alleging they But Loreto counters that he hasn't yet received a penny on most of the cases and wants to see the whole fi le before he de- cides what he should charge for his portion. Loreto also alleges the new fi rm has breached the terms of the transfers by failing to hold funds in trust for his benefi t un- til the dispute is settled. At the same time, Loreto has delivered accounts to 192 clients. His ac- tions include 14 Small Claims Court matters and 26 assessments currently underway. Th e rest of the clients have received bills for $100,000 from Loreto as he at- tempts to gain access to their fi les. None of the allegations have been proven in court. For his part, Loreto says the new 'They're so pissed off because I'm still going,' Frank Loreto says of his for- mer colleagues. 'Guess what, Frank Loreto's loud and he's a survivor.' settlements, with the terms of the contingency fee agreements typically reserving 30 per cent of the payout for the law fi rm's fee. But the defendants say Loreto is only en- titled to fees for the billable hours of work done on the fi les before the transfer, regardless of the size of the fi nal settlement. fi rm has kept clients in the dark about their obligations to him. "I don't want to sue the clients," he tells Law Times. "Th e clients have paid the fees. I tell them, 'It's not you I'm after.' But everybody's got their money except Frank Loreto. And Frank Loreto's the guy who paid all the bills. "I incurred all the disbursements. I paid these people every two weeks come rain or shine, and you know you don't make money on every fi le. Th ese are fi les that I carried for nine or 10 bloody years. I just want to get my See Lawyers, page 5 Harnessing the benefits of diversity BY MICHAEL McKIERNAN Law Times cision to grow dreadlocks at law school, her friend, a black lawyer on Bay Street, thought it could have serious repercussions on her corporate law career. "She told me, 'Good luck get- ting a job with those,'" Abraham said. "It seems ridiculous, but I thought it was true and I'd have to fi nd a diff erent type of career that would fi t the way I look." Some time later, she inter- W viewed with Cassels Brock & Blackwell LLP for an articling position with the dreadlocks. "It wasn't an issue at all," said hen Hermie Abra- ham made the seem- ingly innocuous de- Abraham, who got the job. She fears minority lawyers are ruling themselves out of cer- tain legal careers, including Bay Street fi rms, simply because of a feeling that they don't belong there. Abraham, a speaker at an event on diversity in the legal profession organized by Ryerson University's Diversity Institute and Law Research Centre last week, told the audience that feel- ing shouldn't eliminate an option they'd otherwise consider. "I think we often approach with the feeling that we are somehow lesser but we have to realize we have trained and we're just as good as anybody else," Abraham said. Constance Sugiyama, a part- ner with a Japanese background practising at Gowling Lafl eur Henderson LLP, said she has faced many barriers in her 30-year legal career because of her ethnicity and her sex. But as large clients demand diversity from their le- gal partners, she thinks fi rms are more likely to respond thanks to their primary driver: money. "Th ere's nothing that moti- vates a fi rm more than a client saying it matters to them," she said. "If you've got systemic bar- riers, you're shooting yourself in the foot. People think diversity is about affi rmative action, but it's not. It's about making the playing fi eld level and removing barriers so those great people can come into your fi rm. Fundamen- tally, it's a competitive issue." Frank Walwyn, a partner at WeirFoulds LLP and president of #1 Untitled-1 1 the Canadian Association of Black Lawyers, said lawyers from minor- ity groups can leverage their back- grounds to their advantage, some- thing fi rms are starting to catch on to. His own practice is largely based on high-end, lucrative litiga- tion in Caribbean countries where the holding companies of many large businesses are located. Wal- wyn uses his Caribbean roots to fi ght on behalf of hedge funds in commercial disputes in jurisdic- tions such as St. Kitts, Antigua, and the British Virgin Islands. "When you want to get to the real money, that's where you've got to go," he said. "It opened a win- dow to a part of practice my fi rm would never have had exposure to if I wasn't there. It's a profi t centre See Tapping, page 5 LT Digital version.indd 1 Software application for Real Estate Law Offices in Canada. Used by over 6,000 professionals in 2,500 law firms. To find out more call or email us today 1 866.367.7648 I ©2010 Do Process Software Ltd. The Conveyancer is a registered trademark of Do Process Software Ltd. All rights reserved. 9/22/10 10:05:05 AM 6/25/10 12:59:47 PM Relentless Change 6 Hollow Victory 8 Focus On Business of Law Quote of the week "There are many young lawyers today who just don't want to become partners in the tradition- al way. There are additional re- sponsibilities, they have to work longer hours and are required to make capital investment. I think a lot of young lawyers just wrap that up and call it quality of life. It's a new generation thing." — Robert Denney, Robert Denney Associates Inc., See Firms, page 11 Billions of dollars invested, not a penny lost. November 29, 2010 5/4/10 2:49:21 PM Inside This Issue 3 Click here to subscribe today to LAW TIMES Photo: Michael McKiernan

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