One Los Angeles law firm has placed its bet on the profitability of class action pension lawsuits filed on behalf of employees and so far the strategy is paying off.
Liner Yankelevitz Sunshine & Regenstreif LLP, with 92 lawyers and average profits per partner of over $750,000, has grown so fast that it's had to move four times in the last eight years. Its San Francisco office has moved three times.
The firm's growth has been driven by a decision to target large corporations whose pension funds have plummeted in value following a drastic decline in their stock.
"We've carved out a nice niche," said Stuart Liner, co-founder and name partner of Liner Yankelevitz. "That area of class action litigation has exploded nationally, and we have been successful in taking some very good cases."
The class action cases involve alleged violations of the U.S. Employee Retirement Income Security Act of 1974. Commonly known as ERISA, the law sets minimum standards to protect individuals who enroll in pension and health plans in private industry.
The law has spawned thousands of cases, especially as the stock market tumbled and corporations made changes to their benefit plans to save money.
Four years ago the firm seized on what was to become its specialty when it took on several ERISA cases and began to file more class action lawsuits on behalf of policyholders and consumers. Now, it is among a handful of firms nationwide that have specialized in ERISA class actions.
Most ERISA firms are quite small and represent only the plaintiffs in an ERISA case, but Liner Yankelevitz has been able to reap bigger rewards by representing both plaintiffs and defendants, such as pension funds.
"They're unusual in that they straddle both sides of the fence," said Daniel Feinberg, a partner at Lewis Feinberg Renakar & Jackson PC, which has been filing employee stock lawsuits for 20 years.
In recent years, corporations have paid tens of millions of dollars to settle a growing number of class action lawsuits involving alleged ERISA violations. "It's become a major business among some law firms," said Mark Ugoretz, president of the ERISA Industry Committee, an employer association, who called the increase "monumental."
In many cases plaintiffs can score a victory if they can prove a company or its executives violated a fiduciary duty to their employees one reason why most companies settle so quickly.
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