So that lawsuit we knew was coming has landed.
According to a report last week by Above the Law, Dentons is facing a $25 million lawsuit filed in Calgary by a client that had paid over $34 million to the firm over the last 10 years, primarily in connection with the sale of a division to a private equity firm.
The Venning Group alleges that both Dentons and its partner Shane Stevenson told them that soon after the sale, the partner would come in-house at the Venning Group, and in anticipation of the move, Stevenson became involved as a shareholder or director in a number of Venning’s companies, issuing shares to himself in some instances “without the knowledge or consent of the plaintiffs” and on terms that “were not fair and reasonable to the Venning Group.”
“Dentons and Stevenson represented to [Venning] that it was standard industry practice to grant legal counsel equity participation in the companies for whom they acted,” the lawsuit states.
Citing the failure of Dentons to recommend that the client get independent legal advice in relation to these transactions, the lawsuit claims self-dealing, conflict of interest, and gross over-billing.
Problematic enough. But here’s the part that particularly interests us. Additionally, the complaint alleges that Stevenson has an ongoing substance abuse problem–alcohol and cocaine–that Dentons was aware of. But the firm nevertheless failed to properly supervise his legal work and did not warn Venning that the work done for them by Stevenson might be tainted by his use of drugs.
To add some color to those allegations, evidently the firm had sent Stevenson to multiple stays in a rehabilitation facility and was aware that his substance abuse was re-emerging. Stevenson was charged in 2009 with two separate incidents of impaired driving that were later dropped. And in 2018, he was arrested on charges of impaired driving (with a very high blood alcohol level) in a hit-and-run incident that left a 16-year-old girl dead. His trial is scheduled for October.
“Stevenson was providing advice to the Venning Group while under the influence of intoxicants and narcotics including alcohol and cocaine,” the lawsuit states. Venning Group claims that Dentons owed a duty to Venning to monitor the work Stevenson was doing “given Stevenson’s known substance abuse history and to warn [Venning] they should not rely upon Stevenson’s advice.”
So this is a lawsuit brought in Canada, in the province of Alberta, whose laws we will not opine on. And the level of both addiction and firm awareness of the partner’s issues seems particularly high.
But the 2016 ABA/Hazelden study made it very clear that in the United States the number of seriously impaired lawyers practicing law is heart-stopping: over a third are suffering from substance abuse alone, with depression, anxiety and other emotional conditions magnifying the numbers. Not to mention the effects generated by the increasing use of marijuana and other “light” drugs. All of which geometrically expands the number of claims of professional malfeasance and mismanagement that clients may well be able to make against individual lawyers and their deep-pocket firms.
Of course, Dentons intends “to mount a vigorous defen[s]e to these allegations.”
But the most aggressive and impactful response would be to acknowledge the massive amount of impairment among practitioners today and proactively put in place programs to systemically recognize and support the recovery of those individuals before they tank their own fortunes and those of their firms.
Firms cannot put their heads in the sand when it comes to impaired lawyering. There is too much data out there and the stakes are too high. And unfortunately, so is the level of impairment.