A multi-million dollar dispute in which Mishcon de Reya has accused King & Wood Mallesons of “poaching” two of its New York-based partners has shifted from a New York court battle to arbitration.
In court filings lodged at New York’s Supreme Court, Mishcon’s lawyers have accused KWM of recruiting two Mishcon partners in New York “in an attempt to poach” a lucrative piece of litigation from the firm.
The action against both KWM and patent company ‘ChanBond’ relates to work undertaken by Mishcon’s now-defunct New York office, which closed in 2020.
According to the documents, the U.K.-based firm undertook work for ChanBond between 2015 and 2019, and invested more than $7.6 million in lawyer time, “pursuing a campaign against thirteen defendants through multiple stages of litigation”.
Two people with knowledge of the situation said that the matter is now in arbitration.
In December 2019, the two Mishcon partners overseeing the litigation left the firm and joined KWM, “taking the ChanBond matters with them”, Mishcon’s lawyers, David Slarskey and Evan Fried of Slarskey LLC, said in their filing. They added: “Those matters have since settled for $125 million.”
Mishcon also claimed that, unbeknownst to the firm, the two ex-Mishcon partners, Mark Raskin and Robert Whitman, “had been negotiating an agreement with Defendant KWM since June 2019″, and that the firm’s recruitment of the partners has been “deliberate and calculated”.
The action, filed in February this year, alleges that Raskin and Whitman “believed that if they could uproot the ChanBond matters from Mishcon, and move to a different firm they could avoid Mishcon’s…entitlement to fees, and retain for themselves a greater share of any fees earned”.
In its initial action, Mishcon demanded compensation in one of two ways: either the $7.6 million the firm said it invested in the ChanBond matters, or 87.7% of a 28.5% contingency fee, which Mishcon argued it was entitled to under its engagement letter with ChanBond.
If, as Mishcon’s lawyers have argued, the ChanBond litigation subsequently settled for $125 million, this would represent around $31 million.
In response, KWM later filed a motion in April to dismiss Mishcon’s claims, with the firm’s lawyers arguing that it had “successfully resolved the litigations for ChanBond more than 1.5 years” after Mishcon had ceased to represent the company.
KWM argued that the contract between Mishcon and ChanBond “unambiguously requires any and all fee disputes between them to ‘be finally settled by mandatory binding arbitration’”.
KWM further argues that Mishcon’s action against both it and ChanBond was an attempt to “avoid arbitration with ChanBond”, and that the action itself was proof that Mishcon had “disregarded its arbitration agreement”.
Mark Raskin and Robert Whitman did not respond to requests for comment.
Mishcon and KWM declined to comment.