Ex-clients accuse Trump lawyer and Cadwalader of ‘haphazard’ billing and malpractice
Law Firms
Ex-clients accuse Trump lawyer and Cadwalader of ‘haphazard’ billing and malpractice
June 16, 2023, 8:55 am CDT
Todd Blanche, defense attorney for former President Donald Trump, is being taken to court by former clients who accuse him of overbilling. (AP Photo/Yuki Iwamura, File)
Cadwalader, Wickersham & Taft and its former partner Todd Blanche “severely overbilled” two former clients who are entitled to a $1.65 million refund, a June 12 lawsuit alleges.
The plaintiffs are Adam S. Kaplan and Daniel E. Kaplan, twin brothers who were under investigation by the U.S. Securities and Exchange Commission when they were represented by Blanche and Cadwalader beginning in August 2021, report Law.com, Reuters, Newsweek and Law360.
Blanche is currently representing former President Donald Trump in the New York false records case and the Miami classified documents case. Blanche told publications covering the Kaplans’ lawsuit that it “has no legitimate legal or factual basis.”
Following the investigation, the Kaplan twins were accused in a civil SEC complaint of stealing more than $5 million by overcharging and misappropriating payments from at least 60 clients they advised on investments while at IHT Wealth Management.
Cadwalader had collected $1.65 million from the Kaplans after billing about $2.4 million during the 15-month representation, according to the Kaplans’ lawsuit. Cadwalader “abruptly” stopped representing the Kaplans during the probe, citing the brothers’ failure to pay their legal bills, the lawsuit says. The law firm also withheld the Kaplans’ files and badmouthed them to other lawyers the Kaplans contacted for assistance, the suit alleges.
The suit accuses Cadwalader of “unwarranted, excessive and haphazard billing” at rates the Kaplans never approved. The suit cites “information and belief” that the Kaplans’ names were forged on “a phony retainer agreement.”
Rates started at $905 an hour for a junior associate. After two unannounced rate increases, relatively junior associates were “billing out at far more than $1,000 an hour,” the suit says. Lawyers billed “at exorbitant rates,” doing work that is typically done by paralegals, the suit says.
The suit also alleges Cadwalader failed to notify insurers who were responsible for paying the Kaplans’ fees. And the law firm prepared the Kaplans for depositions, then advised them not to attend, the suit says. The SEC was angered when the depositions were canceled, according to the suit.
The suit alleges legal malpractice and breach of fiduciary duty.
A Cadwalader spokesperson did not comment in response to the ABA Journal’s request.
The Kaplan brothers have previously been involved in malpractice litigation alleging a failure to pay legal bills, according to coverage by Newsweek and Law360.
The Kaplans had sued Conway & Conway for alleged malpractice after failing to pay $45,000 in legal fees, the Conway law firm alleged in its own lawsuit against the brothers. The law firm and the Kaplans ended the lawsuit in August 2022.
