16 janvier, 2008 11:58
Law firm scandal: Fallout at the top
David Warren leaves the managing post at Verrill Dana after an attorney allegedly stole $401,000.
By TREVOR MAXWELL, Staff Writer January 15, 2008
David Warren
The managing partner at one of the state's most prestigious law firms has stepped down in the wake of an alleged embezzlement and theft by another longtime partner.
David Warren will continue his role as a partner at Verrill Dana LLP, but will no longer lead the Portland-based firm. Warren, who has been managing partner since 1994, made his decision after Christmas and announced it to the full partnership at a meeting last week. A letter was issued to clients Monday.
Also Monday, the firm disclosed the amount -- $401,000 -- that former partner John D. Duncan is accused of stealing. The Falmouth resident had been a trusts and estates lawyer for Verrill Dana for 29 years, and was expelled by the firm in November.
"At its essence, our trust in John Duncan was misplaced," Warren said Thursday at a meeting of the partners, according to the letter sent out to clients. He said stepping down would best enable him to continue his contributions to the firm. A new managing partner is expected to be in place by the end of June.
Warren declined a request for an interview because he is a defendant in a complaint filed earlier this month with the Maine Human Rights Commission, and with the state board that oversees the conduct of lawyers.
"I think he concluded the best way to move forward and put the Duncan matter behind us was for him to make that decision" to step down, said Gregg Ginn, the Verrill Dana partner who has been a spokesman on the matter.
Ginn said an external audit showed Duncan embezzled $185,000 that was supposed to have been shared with the more than 50 partners in the firm. The audit showed Duncan stole $109,000 from a total of 10 client accounts, beginning in 1997 and ending in January of last year. Duncan also allegedly overbilled three clients for a total of $107,000. Ginn said those totals could change, as the firm continues its own review and receives information from former Duncan clients.
"Anyone who is asking for a review of John Duncan's bills, we are turning that over to outside attorneys, and we are providing that review," Ginn said. He said the firm has started the process of reimbursing clients for the money taken, plus interest.
Warren built a practice in corporate law before devoting most of his time to the day-to-day operations of the firm, as managing partner. He also holds leadership positions with several organizations, including the Maine State Chamber of Commerce, Maine Medical Center and the Portland Public Library.
Inside the firm, Warren carries a great amount of respect, and is credited for guiding Verrill Dana out of a slump in the early 1990s that coincided with an economic recession.
But he faced increasing scrutiny -- both within the firm and from the public -- for his handling of the Duncan situation.
In June of last year, a secretary reported Duncan for writing several checks to himself from a client account. Warren and other Verrill Dana leaders accepted an explanation and a repayment check from the apologetic Duncan.
They believed the lawyer's story that he had taken only $77,500 that was supposed to go to the partnership.
"There was a time that John was profusely apologetic, remorseful and regretting what he had done," Ginn said in an interview last month. "He maintained it was a matter of funds that were earned and should have been deposited to the firm's account."
It was not until October, after the secretary gave notice of a potential lawsuit, that the firm brought in outside auditors to check the books.
Their report showed Duncan had also stolen from multiple clients. The firm notified authorities, and Duncan was fired on Nov. 8.
Although some partners pushed for Warren to keep his top spot, he apparently decided the change was needed to move the 145-year-old firm forward.
"I think he feels very clearly that his trust in John Duncan was misplaced, and he regrets that, there is no question," Ginn said. But Ginn, who has reviewed all of the internal documents related to the matter, does not believe Warren or any other Verrill Dana attorneys tried to cover up any misconduct.
The results of the audit were forwarded to state and federal prosecutors and to the Maine Board of Bar Overseers, the state agency that governs lawyers' professional ethics.
Cumberland County District Attorney Stephanie Anderson said she referred the file to the Maine Attorney General's Office. Anderson said she wants to avoid the appearance of any conflict of interest because her brother-in-law is a lawyer with Verrill Dana.
Leanne Robbin, head of the financial crimes division at the AG's office, confirmed Monday that she received the file from Anderson last week, but could not comment further on any criminal investigation.
Duncan and his attorney, Toby Dilworth, have declined to comment.
Ellie Rommel, the former legal secretary for Duncan, filed a complaint on Jan. 2 with the Maine Human Rights Commission against Verrill Dana, Warren and other members of the firm's executive board.
A complaint to the commission is a precursor to a lawsuit. Rommel claims that she submitted her resignation last May and handed over evidence against Duncan in June, but changed her mind and asked to stay with the company and take short-term medical leave. She said Warren denied that request.
Ginn has said Warren and Rommel disagree about what was said last June. The firm contends that Rommel made the decision to leave, and has been asked repeatedly to take another position with Verrill Dana.
Rommel and her attorney, Daniel Lilley of Portland, say the firm failed to protect Rommel under the Whistleblowers' Protection Act. They have also filed a complaint with the Maine Board of Bar Overseers.
