Last week, the prominent AmLaw 100 firm Polsinelli took legal action against its former partner, Louis Mastriani, by filing a federal lawsuit. The dispute centers around a substantial client contingency fee of $1.5 million, which the firm claims Mastriani misappropriated.

Mastriani had joined Polsinelli in 2022, transitioning from AMS Trade—a firm that, though no longer operational, had not been completely dissolved due to ongoing payments of previously earned contingency fees. In a significant turn of events in 2023, one such client transferred their business to Polsinelli, under the assumption that their contingency fees would follow to the new firm.

According to a report by Law.com, the sequence of events did not unfold as expected. The lawsuit details that Mastriani secured a favorable settlement earlier this year, leading to a client agreement to pay the entire sum by June 5, earmarked for Polsinelli. Contrary to what was expected, Mastriani allegedly concealed this payment detail from Polsinelli’s management and misled the client to defer the payment to AMS for the autumn, suggesting a potential transfer of funds to a new firm he might join.

The client, however, did not agree to this arrangement and proceeded to pay the fee directly to Polsinelli. The complaint further alleges that Mastriani then misrepresented these fees as relating to prior work and instructed non-attorney staff to transfer the funds to the AMS Trade account, as had been done before.

This controversy surfaced just weeks before Mastriani announced his departure from Polsinelli to join another law firm, Buchanan Ingersoll & Rooney, adding another layer of complexity to the conflict.

Mastriani has vehemently denied the allegations, describing the lawsuit as a retaliatory move by Polsinelli in response to his departure, which he claims was driven by the firm's "greed and deceit." He asserts that the complaint is filled with inaccuracies and false statements, aimed at unlawfully extracting funds from him and his former firm, AMS. Mastriani has expressed his readiness to defend his position and counterclaim if necessary.

The legal community watches closely as this case unfolds, highlighting not only the complexities of law firm dynamics and partnership agreements but also the intricate dance of client fee allocations within top law firms. This lawsuit could potentially set a precedent for how similar cases are handled in the future, underscoring the importance of transparency and proper communication in financial transactions and client relationships in the legal sector.