Schulman Plans Exit from Securities Scene

Alan Schulman’s departure from his current law firm, Bernstein Litowitz Berger & Grossmann, promises to be somewhat less eventful than his last exit from a major plaintiff shop. The San Diego litigator is retiring at the end of this year, planning to spend more time teaching at the University of San Diego School of Law, and much less time stressing over big-money securities cases. “I’ve been doing this for 33 years, so it’s a big deal for me,” Schulman said Wednesday. “I’m just burned out, and ready to do something new.”

Schulman said he was starting to feel the same way in 1999, when a bitter falling-out with star plaintiff lawyer William Lerach led to his departure from the firm then known as Milberg, Weiss, Hynes, Bershad & Lerach. “I was pretty much burned out by the time I left Milberg, and it was sort of exciting to build something from scratch,” Schulman said Wednesday. That he’s done: Bernstein’s West Coast office has grown to 14 lawyers —  soon to be 12, upon the departures of Schulman and another retiring partner, Robert Gans — as the firm has become a major player in the class action bar.

Of course, the landscape has changed over the last seven years: Milberg broke apart, with Lerach turning the firm’s West Coast operation into Lerach Coughlin Stoia Geller Rudman & Robbins — currently the pre-eminent plaintiff firm — and Milberg Weiss began a slow decline that intensified when the firm and two of its name partners were indicted earlier this year for allegedly paying illegal kickbacks to clients in class actions. And in that time, Bernstein Litowitz has become perhaps the pre-eminent competitor with Lerach, winning a handful of massive settlements for institutional investors.

In 2000, Schulman dished to Fortune magazine on his differences with Lerach. Indeed, the story said Schulman, then Milberg’s No. 2 West Coast partner, told firm leaders to choose between him and Lerach. Schulman was the one who left. “I did not want to be in a law partnership with him anymore,” he told Fortune, calling Lerach “vindictive” and “dangerous.” Among other problems he had with the firm, the story said, Schulman was upset with the relationship with an expert witness, John Torkelsen.

It was later reported by the Wall Street Journal that Schulman has been cooperating with the probe of Milberg Weiss, and in recent months, L.A. federal prosecutors have been zeroing in on Torkelsen — who’s currently in federal prison on unrelated charges having to do with an investment fund. They’ve secured the cooperation of Torkelsen’s ex-wife, and are now asking firms with which Milberg co-counseled to turn over Torkelsen-related documents that Milberg’s own lawyers say are privileged.

Schulman and John “Sean” Coffey, who over the last few years has been Bernstein Litowitz’s highest-profile partner, said the impending retirement is unrelated to the Milberg probe. “When Alan agreed to open up our West Coast office on Jan. 21, 2000, he anticipated, and we expected, he’d be there five years,” Coffey said. “And we were lucky enough to have him for seven.”

— Justin Scheck

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