Lewis Brisbois operated as ‘mom and pop’ outfit, fired executive said

Four years ago, an attorney for a former executive at Lewis Brisbois Bisgaard & Smith LLP sent a letter to the state Labor and Workforce Development Agency alleging serious concerns about the firm that included poor accounting practices, misuse of firm and client assets, and potential embezzlement.

The six-page letter describes a law firm that ballooned from a small shop in Los Angeles to a sprawling mega-firm with 1,700 lawyers in 55 cities, yet continued to function as one man's family enterprise in which four of his sons were on the payroll and another was a paid consultant.

"[E]ven though the Firm is an Am Law 100 Firm with over one hundred equity partners and over one thousand lawyers, Firm Co-Founder and Chairman Bob Lewis appeared to run this massive partnership as if the Firm was still a 'mom and pop' operation still controlled by Bob Lewis," reads the Aug. 22, 2019 letter sent by a lawyer for Robert Kamins, the chief operating officer at Lewis Brisbois for 21/2 years, from January 2016 to August 2018.

Lewis Brisbois said in a statement Tuesday: "These dated allegations are not news to us. We have never been contacted by the California Labor and Workforce Development Agency regarding this issue and no action was ever taken by the Agency."

Kamins, who now runs a Los Angeles law firm consultancy, claims in the letter that in August 2018, after he raised concerns about the issues, he was pressured to resign, and was fired when he refused.

"Following Mr. Kamins' termination, the Firm has continued to make operational changes that - rather than stopping the unlawful conduct - have further solidified the control of the Firm in the hands of those who are behind the unlawful conduct," the letter states.

The allegations made by Kamins continued to fester after he left the firm and appeared to be an impetus for more than 130 attorneys leaving in recent weeks to start a new firm, Barber Ranen LLP. John L. Barber, managing partner of the new firm, did not respond to requests for comment. Kamins now does consulting work for Barber Ranen.

To quell the turmoil, Lewis, now 86 years old, stepped down as chairman of the firm May 3 and expanded the size of the management committee from nine members to 15. Firm co-chairman Bob Smith said in a statement that day that "discussions about altering our management structure" had been underway "for some time" and that "recent events" had "created new opportunities ... to expand, grow, strengthen and change our management team."

Bob Lewis remains on the management committee, along with his son Steven R. Lewis and several longtime lieutenants. Ten of the 15-member committee members are in Southern California and seven are in the Los Angeles headquarters.

Another Lewis son, Douglas W. Lewis, is managing partner of the firm's San Diego office. Son Daniel R. Lewis is a partner in Los Angeles.

The firm announced late Tuesday that the management committee had elected New York Managing Partner Greg Katz to be managing partner of the entire firm. Katz is co-chair of the General Liability and Transportation practices.

"Greg has proven himself to be an outstanding leader since he joined us 13 years ago and is clearly the right choice for this role," Bob Lewis said in a statement. "I believe Greg and our expanded Management Committee will do great things to carry on the traditions of this firm."

Peter M. Gilhuly is a retired partner at Latham & Watkins LLP who specialized in law firm bankruptcies, and who was involved in the bankruptcies of Thelen LLP, Howrey LLP and Brobeck, Phleger & Harrison, among others. He looked at Kamins' letter at the request of the Daily Journal.

Gilhuly said the dynamic in which one partner runs operations like a personal fiefdom "is not unusual in less well-run law firms that don't have a lot of controls."

"But this one is extraordinary," he said.

Noting that Kamins said he spent 10 years as a non-attorney executive at O'Melveny & Myers LLP before moving to Lewis Brisbois, Gilhuly commented: "My reading is that he can't believe how few controls and how much the managing partner is taking advantage of that fact."

He pointed out that Kamins appears to have had knowledge of firm operations beyond what a traditional COO might have. "The letter is very careful to say, 'I had reason to believe ... ,'" Gilhuly noted.

"There's enough detail in there he clearly looked at this stuff and said, 'Oh my God!'" Gilhuly concluded.

The letter was sent to the Private Attorney General Act, or PAGA, administrator at the Labor and Workforce Development Agency in 2019. Paola Laverde, a spokeswoman for the overseeing Department of Industrial Relations, said in an email on Monday: "A search of the PAGA electronic database shows that only the PAGA notice was received in this claim, no other documents were filed with the PAGA unit. DIR does not have information on any defense or outcome in this case."

A check of the dockets for the Los Angeles County Superior Court and the Central District of California did not turn up any complaints filed by Kamins against Lewis Brisbois.

Kamins' lawyer, David M. deRubertis of the deRubertis Law Firm in Studio City, said the matter was confidential and that he would not disclose an outcome or say why the letter was sent to the PAGA administrator.

Responding to a request for information on any complaint filed by Kamins or others against Bob Lewis, the State Bar emailed Tuesday: "By law, whether or not we have received a disciplinary complaint and whether or not we have pursued any disciplinary investigation is confidential." It noted, "there has been no public disciplinary action" against Lewis, according to his public profile page on the bar website.

Among the allegations in the letter:

• Kamins said he "investigated and made disclosures concerning Bob Lewis's apparent manipulation of the Firm's finances, including suspicious and questionable year-end practices." He said "insiders within the Firm had advance knowledge of what the year-end Firm figures would be well before the year actually closed and, contrary to the regular practice at law firms of aggressively seeking to make year-end collections to ensure financial targets were met, the Firm appeared to intentionally fail to make year-end collections that were capable of being collected thereby in both instances limiting financial return to the firm's equity partners."

• Kamins "reasonably believed" that Lewis and another of his sons, Tommy, who worked in the firm's information technology department, "and other close colleagues were embezzling and/or converting Firm assets to personal use through exploitation of corporate rewards points and gift cards accrued as a result of millions of dollars of Firm purchases."

It is unclear if Tommy Lewis is still employed by the law firm.

• "[D]eliberate avoidance of financial planning/budgeting; mysterious bank accounts spread between two banks (i.e., using one bank for all deposits and another for all payments); willful avoidance of financial best practices to improve cash flow efficiency; Bob Lewis's rigid control of all real estate dealings; mysterious sealed commission envelopes handed by the real estate broker to Bob Lewis without any corresponding and public paper trail establishing deposits of checks into Firm accounts; etc."

• "Hundreds of thousands of dollars of reimbursement to Bob Lewis' son Tommy Lewis without adequate support; suspicious patterns of purchases and returns by Tommy Lewis; and inadequately supported reimbursement checks to Barbara Cheen (the Firm's Director of Client Relations who oversaw the Accounts Receivable group and the collections groups ... for what appeared to be personal and non-business-related expenses."

• Kamins said he "observed and disclosed questionable and overly close vendor relationships (e.g., use of Craig Lewis, another of Bob Lewis's sons, as health insurance broker, travel agency, real estate commission splits, copy paper vendor, IT vendors, etc.)."

It is unclear if Craig Lewis still does work for the law firm.

PAGA expert Glenn A. Danas of Clarkson Law Firm PC was asked by the Daily Journal to review the letter and said it was most likely used as leverage, "putting pressure, opening up the possibility of individual liability as to Mr. Lewis if not liability on behalf of Lewis Brisbois."

PAGA claims are usually made by individuals on behalf of many others similarly situated, such as wage and hour violations. However, Danas noted, it is unlikely there were many other employees, if any, who were C-suite officers of the firm.

Claims under California Labor Code Section 1102.5 - repeatedly referenced in the letter - can bring punitive damages for a whistleblower employee, and are typically brought by individuals, Danas explained. A PAGA claim, if it had gone further and been settled, would have had to have been reported to the state agency and approved by a court, Danas said.

If the case settled, the whistleblower claims most likely would have been handled through arbitration, perhaps under the terms of Kamins' contract, according to Danas.