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Malpractice case against law firm spotlights conflict of interest

Although it made a strong effort to avoid court, that is precisely the venue where a lawsuit involving large national law firm Blank Rome is now headed. A decision rendered by a New York judge last week ruled against the firm’s summary judgment motion to dismiss a legal malpractice case against it. In doing so, the court ruled that key factual issues remain unresolved and must be evaluated by a jury.

At the core of a plaintiff’s complaint against select attorneys of the firm is an allegation of deceit grounded in a conflict of interest claim. The plaintiff is the divorced spouse of a one-time top-tier executive with the eminent financial management firm Morgan Stanley. Her lawsuit contends that Blank Rome began representing her in divorce proceedings in 2009 without divulging that it was also representing Morgan Stanley in multiple transactions. At the time of her divorce, the woman’s husband was a member of the firm’s management committee.

The plaintiff’s complaint states that Blank Rome’s failure to advise her of the simultaneous representation was a clear act of malpractice. Moreover, it stresses, the law firm remained reticent on that point because it was more concerned about its relationship with the financial giant and her spouse than it was with advocating diligently on her behalf.

The woman ultimately settled her divorce case, receiving an award of approximately $9 million. She did so after waiving her right to value her husband’s securities licenses, an act that was without knowledge that they were worth far more than she was led to believe.

The plaintiff now seeks damages for that undervaluing. She blames Blank Rome for that, stating that the firm was protecting her former spouse.

The complaint demands about $33 million in damages. The law firm has countersued for close to $100,000 it states it is owed in outstanding legal fees.

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