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Company sues law firm: We rely on your advice, not vice versa

Uh, what exactly were we getting from you?

In a recent legal matter involving Playboy Enterprises Inc., the adult entertainment company and business empire has expressed ire with a law firm that represented it in a multi-million-dollar matter.

When the case details are pared back and reduced to one central concern and contention made by Playboy, the company’s indignation is easily seen and eminently clear.

Moreover, it likely reflects the frustration similarly felt by many other clients in California and nationally that feel as though they’re paying big bucks for legal services while ultimately receiving inadequate or incompetent legal representation.

In a nutshell, the case involved a wrongful termination claim brought against Playboy by a former employee, who contended that the company unlawfully retaliated against her in a bonus-related matter involving other employees.

Playboy hired the law firm to defend it against the claim. The case ultimately went to trial, where a jury awarded the ex-worker $6 million in damages and attorney’s fees.

That didn’t sit well with Playboy, which subsequently sued its law firm, filing a complaint in a Los Angeles court last month alleging the firm’s negligence in failing to recommend a settlement in the case.

Playboy’s complaint specifically alleges that the firm turned to it to determine an appropriate settlement range in the case, rather than acting in its professional capacity as the company’s legal expert and adviser to offer much-needed advice on the matter.

The $6 million verdict exceeded Playboy’s employment liability insurance cap by $1 million. The company’s lawsuit against the firm contends that its lawyers negligently underestimated liability exposure by as much as $3.2 million.

In other words, Playboy contends that settlement would have been far preferable to a jury trial and that the law firm should have known that and recommended the company engage in settlement discussions.

A law firm spokesperson says that the firm anticipates “vindication and collection of [its] unpaid fees.”

Time, of course, will tell the tale on that.

And we will make a note to apprise our readers of the ultimate outcome in the case.

Source: Insurance Journal, “Playboy verdict leads to malpractice suit in California,” Ellen Rosen, April 30, 2015