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Their Own Defense

A referral from his former boss Bennett led Michael Levy, left, to advise former Enron employees, including president Jeffrey McMahon. The work brought Levy's firm more than $15 million.
A referral from his former boss Bennett led Michael Levy, left, to advise former Enron employees, including president Jeffrey McMahon. The work brought Levy's firm more than $15 million. (By Linda Spillers -- Bloomberg News)
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"You get cases serendipitously," he said.

Just as often, though, it is nearly impossible to break into circles of relationships that are decades old, overwhelmingly white and male, and mostly closed to outsiders. Social networks are key to the process.

Former U.S. attorney Earl Silbert, a dean of the local white-collar legal group who handled part of the Watergate investigation, invites defense attorneys, former prosecutors and longtime family friends unconnected to the legal profession to his annual garden party around Memorial Day. Another batch of lawyers who worked together on the sprawling BCCI bank-fraud case in the early 1990s has for more than a dozen years made an annual ski pilgrimage to Aspen, Colo., a social event that turns to business talk on the lifts. Former Treasury official Robert Altman, who was acquitted of charges involving his role at BCCI, makes the journey to what's known as "the boys' ski trip," as well.

"I think it's more social, frankly, although without question, a substantial part of the conversation over dinner or on the ski lift is going to be about cases," said lawyer Hank Schuelke, a charter member of the traveling party, which expanded to include attorneys not involved in the Altman investigation. "I bet you every year there are referrals that arise."

Defense lawyer and former FBI general counsel Howard Shapiro noted, "It's useful to be in a number of these overlapping circles because they create opportunities in both directions." This interlocking world of referrals can work to the client's advantage, too, defense lawyers say -- for example, helping them encourage other government targets to resist pressure to plead guilty and implicate colleagues.

But former prosecutors say the situation raises questions about whether lawyers are fully protecting their clients' interests. Plato Cacheris, who has practiced law in the region for nearly 40 years, said lawyers can struggle while trying to please two masters: the client and the other lawyers who send them business. He declined to provide examples.

Friendship, in any case, extends only so far. When a client refuses to pay, not uncommon in the case of executives who have lost their jobs and corporate legal insurance policies, it is all right to complain to the lawyer who referred the case but not to hit him up for money.

"You apologize; what else can you do?" said William H. Jeffress Jr., who has represented Reliant Energy, the former chief executive at Rite Aid, and Vice President Cheney's former chief of staff I. Lewis "Scooter" Libby. "If the guy has trouble getting paid, he shouldn't call me," he added, laughing.

Bennett became the subject of a critical report last year that he allegedly assured prosecutors that lawyers for former KPMG partners would cooperate with the investigation. A federal judge ruled that the giant accounting firm had pressured its employees to go along with the government in an effort to save itself from being indicted.

In an interview, Bennett called the trade magazine's report "grossly unfair" and said his comments to the government were distorted. He added that the defense lawyers involved in the KPMG case, many of them his friends for decades, ultimately did not cooperate and are fighting criminal conspiracy charges. The most one can ask, Bennett said, is to not be misled.

"One advantage if you know the people and you've danced with them before is there's an element of trust there," he said. "I don't mind getting stabbed in the chest. I don't want to be stabbed in the back."


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