Professional Liability

Attorneys in our Professional Liability practice provide our clients with a full range of services. We regularly defend lawyers, accountants, investment advisors, brokers, and other professionals in a wide array of litigation:

• Legal malpractice
• Accounting malpractice
• Investment advisor malpractice
  
• Breach of fiduciary duty
• Conflicts of interest
• Securities fraud
• Legal ethics involving lawyers
• Racketeer Influenced and Corrupt Organizations (RICO) Act violations brought against attorneys, accountants, insurance brokers and agents, and corporate officers and directors. 

In addition, we represent professional liability insurers in coverage litigation, arbitration, and ADR proceedings, as well as provide general counseling and advice.

Since high damage amounts are commonly sought, professional liability litigation is a high-stakes affair, often involving both large damages claims and the threat of significant reputational harm. To effectively defend professional liability claims, a lawyer must understand the following:

• what the client-professional was required to do,
• what theories of law should apply,
• what other actors may be responsible,
• what type of expert testimony will be required, and
• what the monetary and non-monetary risks are for the client.

We understand our professional clients’ needs to have the claim resolved quickly and reasonably whenever possible. We are also sensitive to client concerns regarding the high costs often associated with defending professional liability actions. We constantly seek alternatives to expensive, protracted litigation and encourage arbitration and mediation in all appropriate cases.

Litigation, when necessary, is handled by a group of attorneys, paralegals, and staff with extensive experience in liability issues.

Tax Controversy/Professional Standards
We also represent tax professionals who have been charged with misconduct by federal or state regulators or other licensing authorities.

Our attorneys form one of the nation's premier tax advisory practices, regularly appearing as special tax counsel in a wide variety of transactions and advising corporations on all aspects of tax management, including planning, IRS audits, administrative appeals, and litigation.

Both Congress (American Jobs Creation Act) and the Department of the Treasury (Circular 230) have recently dramatically altered the relationships between corporations and their tax advisors in ways that significantly affect corporate governance.  The new rules change the financial reporting obligations of corporations with respect to tax matters, the types of opinions on which management may rely, the penalty regime for relying on "disqualified opinions," and the obligations of in-house counsel in advising management in tax matters.  Those rules also impose SEC reporting obligations when certain penalties are imposed and dictate the situations under which the IRS may demand production of an attorney's analyses of tax reserves.

Our tax professionals routinely advise corporate tax departments on how to comply with these rules and how to avoid draconian penalties.  We counsel corporate clients and their advisors on preserving privileges and assuring that the tax advice they give and receive and the tax reporting they provide offers the maximum protection from the assertion of penalties.

Representative Matters

Representative Matters Defending Accounting Firms

• Class-action securities and professional malpractice litigation arising from the bankruptcy of a major national homebuilder.  Alleging errors in accounting for net realizable value write-offs and deferred tax asset estimates among other issues, plaintiffs sought $95 million in actual damages and $1 billion in punitive damages.  After a 66-day jury trial, the matter ended in a defense verdict.  We also represented the firm and two of its partners in related State Board of Accountancy proceedings.
• Professional malpractice stockholder lawsuit arising out of the failure of a life insurance company and an associated insurance service agency, involving alleged failures in accounting for life insurance premiums and calculating required reserves.
• Professional malpractice action brought by foreign investors in British Virgin Islands corporations that owned US real estate, alleging professional negligence, breach of fiduciary duty, fraud, and racketeering arising from alleged improper disclosures regarding asset sales, erroneous financial statements, and erroneous tax planning and advice.
• Professional malpractice action filed by a bankruptcy trustee of a NASDAQ-listed national distributor of personal care products.  Plaintiff sought over $100 million in damages, alleging the improper auditing and application of revenue recognition criteria and errors in the installation of a major ERP system impacting financial statements, customer relationship management, and supply chain management.
  

Representative Matters Defending Attorneys & Law Firms

• Professional malpractice claim brought by a US insurance company against its former lawyers, alleging that defendants aided and abetted corporate officers in executing self-dealing transactions and excessive executive compensation scheme.
• Professional malpractice actions and related civil and criminal enforcement actions against the general counsel for a major US corporation who was alleged to have engaged in self-dealing transactions and unjust enrichment through executive compensation scheme.
• Counseling of major Washington and national law firms on inchoate claims arising out our clients’ prior work for a variety of clients ranging from Indian Tribal Governments to major US corporations.

Representative Matters Defending Investment Advisor

• Serve as national counsel to financial services firm against class action and individual lawsuits involving RICO, fraud and other state law claims brought by clients who participated in alleged tax shelters.

Noteworthy

• Best Lawyers in America (2006): Legal Malpractice—Toni Ianniello, Roger Warin

Select News & Events

• Best Lawyers in America 2007 Lists Steptoe Attorneys
• Antonia Ianniello Speaking at ABA Standing Committee on Lawyers' Professional Liability Conference in Arizona

Publications

• Russell: Prosecuting Defense Counsel for Obstruction
  November 21, 2007, New York Law Journal