When the renowned plaintiffs' firm Milberg Weiss was indicted in 2006 for paying kickbacks to clients, most commentators saw the scandal as the product of five dishonest lawyers. This Note argues that the causes were more complex than the moral shortcomings of a few attorneys; rather, the kickbacks were but one symptom of a deeply flawed system for selecting lead counsel in securities class action lawsuits. Although the Private Securities Litigation Reform Act of 1995 attempted to curb abusive behavior by the plaintiffs' bar, its focus on reforming plaintiff behavior meant that attorneys were left relatively free to continue using whichever tactic served their financial ends. Using Milberg Weiss's behavior to guide analysis, this Note assesses the problems of lead-counsel selection. These problems trace to a common source: an imbalance of information between attorneys vying for appointment as lead counsel and the judge who must select one of these attorneys. To correct this problem, this Note proposes implementing screening and signaling procedures to determine the, "most adequate counsel" who can provide quality representation for every member of a class.
James P. McDonald,
Milberg’s Monopoly: Restoring Honesty and Competition to the Plaintiffs’ Bar,
58 Duke Law Journal
Available at: http://scholarship.law.duke.edu/dlj/vol58/iss3/4