Fascinating article about Milberg Weiss

I read this article in Fortune quite a while ago and have just come across it again. Absolutely fascinating.

The Brillo-haired Lerach, 60, who bitterly split with Weiss in 2004, taking Milberg's San Diego-based West Coast operation along with him in a new firm, owns a home in Rancho Santa Fe, Calif., and vacation properties in Steamboat Springs, Colo., and Hawaii. Lerach travels the country in a chartered jet, says his exercise is drinking Scotch, and will be married this month for the fourth time, to a partner at his firm.

When police showed up at 20563 Beachwood Drive in Rocky River, Ohio, an upscale Cleveland suburb, they were probably expecting to find just another domestic dispute. It was about 4 p.m. on Aug. 22,1996, and a 37-year-old woman named Pamela Davis had reported that her boyfriend had assaulted her, bloodying her mouth.

What the officers were not expecting was the dizzying tale that Davis began telling. She identified her attacker as James "J.J." Little, an attorney with Arter & Hadden, the big Cleveland firm. She said she'd met Little five months earlier at a bar and that although she was still married and had a young son, she and Little planned on tying the knot in December. She explained that Little had a $1,000-a-week crack habit, that it wasn't the first time Little had struck her, that one time she'd ended up in the emergency room, that Little was usually "a very gentle man," that she didn't really want to press charges, and that she was three months' pregnant with his child.

Lerach signed on in 1976, opening Milberg's California office in San Diego. He was ferocious and creative, and worked like a madman, building "Milberg West" into an operation that competed with the New York office for influence and profits. His special target was Silicon Valley companies, whose volatile stocks made them juicy prey; he transformed Milberg into a lucrative volume business that churned out scores of class actions a year. This business model allowed him to settle cases when he wanted; if defense lawyers didn't buckle, he'd simply cash in on another lawsuit and continue to torment their clients.

A favorite Lerach tactic was to scream at CEOs, telling one: "I'm going to take away your f***ing condo in Maui! I'm going to take away every penny you own!" Milberg sued several companies repeatedly - 3Com (Charts) nine times. T.J. Rodgers, CEO of Cypress Semiconductor (Charts), called him "lower than pond scum."

Nine out of ten cases did settle. Companies reasoned that paying up was safer and cheaper than going to trial, since insurance companies paid most of the settlement bill. On average, investors recovered only about 15 cents of every lost dollar, while Milberg Weiss routinely pocketed millions. Weiss and Lerach saw their personal takes soar from $3.4 million apiece in 1990 to $16 million in 1995. During the 1990s, both men earned more than $100 million. Bitter executives came to view it all as an extortion racket - they called it getting "Lerached."