The King of Torts

The King of Torts Page 21

The Young firm's next reorganization occurred in the same chaotic fashion as the previous ones, and for the same reasons - too many new clients, too much new paperwork, not enough manpower, an unclear chain of command, and a very uncertain management style because no one at the top had ever managed before, maybe with the exception of Miss Glick. Three days after Clay returned from Ketchum, Paulette and Jonah confronted him in his office with a long list of urgent problems. Mutiny was in the air. Nerves were frayed and the fatigue made bad matters worse.

According to the best estimate, the firm now had 3,320 Dyloft cases, and since the cases were brand-new they all needed immediate attention. Not counting Paulette, who was reluctantly assuming the role of office manager, and not counting Jonah, who was spending ten hours a day on a computer system to keep up with the cases, and, of course, not counting Clay because he was the boss and had to give interviews and travel to Idaho, the firm had hired two lawyers and now had ten paralegals, none of whom had more than three months' experience, except for Rodney. "I can't tell a good one from a bad one," Paulette said. "It's too early."

She estimated that each paralegal could handle between one hundred and two hundred cases. "These clients are scared," she said. "They're scared because they have these tumors. They're scared because Dyloft is all over the press. Hell, they're scared because we've scared the hell out of them."

"They want to be talked to," Jonah said. "And they want a lawyer on the other end of the phone, not some frantic paralegal on an assembly line. I'm afraid we'll be losing clients real soon."

"We're not going to lose clients," Clay said, thinking of all those nice sharks he'd just met out in Idaho and how happy they'd be to pick up his disgruntled clients.

"We're drowning in paperwork," Paulette said, taking the tag from Jonah and ignoring Clay. "Every preliminary medical test has got to be analyzed, then verified with a follow-up. Right now, we think we have about four hundred people who need further testing. These could be the serious cases; these people could be dying, Clay. But somebody has to coordinate their medical care with the doctors. It isn't getting done, Clay, okay?"

"I'm listening," he said. "How many lawyers do we need?"

Paulette cast a weary look at Jonah. The two had no answer. "Ten?" she said.

"At least ten," Jonah said. "Ten for now, right now, and maybe more later."

"We're cranking up the advertising," Clay said.

There was a long weary pause as Jonah and Paulette absorbed this. He had briefed them on the high points in Ketchum, but not the details. He had assured them that every case they signed up would soon pay big profits, but he had kept settlement strategies to himself. Loose tongues lose lawsuits, French had warned him, and with such an untested staff it was best to keep them in the dark.

A law firm down the street had just given pink slips to thirty-five associates. The economy was soft, billings were down, a merger was in the works; whatever the real reason the story was newsworthy in D.C. because the job market was normally bulletproof. Layoffs! In the legal profession? In D.C.?

Paulette suggested they hire some of those associates - offer them a one-year contract with no promises of any advancement. Clay volunteered to make the calls first thing the next morning. He would also locate office space and furnishings.

Jonah had the rather unusual idea of hiring a doctor for one year, someone to coordinate the tests and medical evidence. "We can get one fresh out of school for a hundred grand a year," he said. "He wouldn't have much experience, but who cares? He's not doing surgery, just paperwork."

"Get it done," Clay said.

Next on Jonah's list was the matter of the Web site. The advertising had made it quite popular but they needed full-time people to respond to it. Plus it needed to be upgraded almost weekly with the developments on the class action and the latest bad news about Dyloft.

"All these clients are desperate for information, Clay," he said.

For those who didn't use the Internet, and Paulette guessed that at least half their clients fell into that group, a Dyloft newsletter was crucial. "We need one full-time person editing and mailing the newsletter," she said.

"Can you find someone?" Clay asked.

"I suppose so."

"Then do it."

She looked at Jonah, as if whatever needed to be said should come from him. Jonah tossed a legal pad on the desk and cracked his knuckles. "Clay, we're spending huge amounts of money here," he said. "Are you sure you know what you're doing?"

"No, but I think so. Just trust me, okay? We're about to make some serious money. To get there, though, we gotta spend some cash."

"And you have the cash?" Paulette asked.

"Yep."

Pace wanted a late drink in a bar in Georgetown, within walking distance of Clay's town house. He was in and out of the city, very vague, as always, about where he'd been and what fire he happened to be fighting. He had lightened up the wardrobe and now preferred brown - brown pointed-toe snakeskin boots, brown suede jacket. Part of his disguise, Clay thought. Halfway through the first beer Pace got around to Dyloft, and it became evident that whatever the current project was it still had something to do with Ackerman Labs.

Clay, with the flair of a fledgling trial lawyer, gave a colorful description of his trip to French's ranch, and the gang of thieves he'd met there, and the contentious three-hour dinner where everybody was drunk and arguing at once, and the Barry and Harry Show. He had no hesitation in giving Pace the details because Pace knew more than anyone.

"I know of Barry and Harry," Pace said, as if they were characters in the underworld.

"They seemed to know their stuff, and for two hundred grand they should."

Clay talked about Carlos Hernandez and Wes Saulsberry and Damon Didier, his new pals on the Plaintiffs' Steering Committee. Pace said he'd heard of them all.

Into the second beer, Pace asked, "You sold Ackerman short, right?" He glanced around, but no one was listening. It was a college bar on a slow night.

"A hundred thousand shares at forty-two fifty," Clay said proudly.

"Ackerman closed today at twenty-three."

"I know. I do the math every day."

"It's time to cover the short and buy it back. Like first thing tomorrow morning."

"Something's coming?"

"Yes, and while you're at it, buy all you can at twenty-three, then hang on for the ride."

"Where might the ride be headed?"

"It'll double."

Six hours later, Clay was at the office, before sunrise, trying to prepare for another day of pure frenzy. And also anxious for the markets to open. His list of things to do ran for two pages, almost all of it involving the enormous task of immediately hiring ten new lawyers and finding work space to house some of them. It looked hopeless, but he had no choice; he called a Realtor at seven-thirty and yanked him out of the shower. At eight-thirty he had a ten-minute interview with a freshly fired young lawyer named Oscar Mulrooney. The poor guy had been a star student at Yale, then highly recruited, then merged out of a job when a megafirm imploded. He'd also been married for two months and was desperate for work. Clay hired him on the spot for $75,000 a year. Mulrooney had four friends, also from Yale, who were also on the streets looking for work. Go get 'em.

At 10 A.M., Clay called his broker and covered his Ackerman short sale, making a profit of $1.9 million and some change. In the same call, he took the entire profit and bought another two hundred thousand shares at $23, using his margin and some account credit. Online, he watched the market all morning. Nothing changed.

Oscar Mulrooney was back at noon with his friends, all as eager as Boy Scouts. Clay hired the others, then gave them the task of renting their furniture, hooking up their phones, doing everything necessary to begin their new careers as low-level mass tort lawyers. It was up to Oscar to hire five more lawyers who would have to find their own office space, etcetera.

The Yale Branch was born.

At 5 P.M. Eastern time, Philo Products announced it would buy the outstanding common stock of Ackerman Labs for $50 a share, a merger with a price tag of $14 billion. Clay watched the drama on the big screen in his conference room, alone because everyone else was answering the damned telephones. The nonstop money channels choked on the news. CNN scrambled reporters to White Plains, New York, headquarters of Ackerman Labs, where they loitered by the front gate as if the beleaguered company might step forward and weep for the cameras.

An endless string of experts and market analysts prattled on with all sorts of groundless opinions. Dyloft was mentioned early and often. Though Ackerman Labs had been badly managed for years, there was no doubt Dyloft had succeeded in shoving it off the cliff.

Was Philo the maker of Tarvan? Pace's client? Had Clay been manipulated to bring about a $14 billion takeover? And most troubling, what did it all mean for the future of Ackerman Labs and Dyloft? While it was certainly exciting to calculate his new profits on the Ackerman stock, he had to ask himself if this meant the end of the Dyloft dream.

But the truth was that there was no way to know. He was a small player in a huge deal between two mammoth corporations. Ackerman Labs had assets, he reassured himself. And the company made a very bad product that harmed many. Justice would prevail.

Patton French called from his airplane, somewhere between Florida and Texas, and asked Clay to sit tight for an hour or so. The Plaintiffs' Steering Committee needed an emergency conference call. His secretary was putting one together.

French was back in an hour, on the ground in Beaumont, where he would meet tomorrow with lawyers who had some cholesterol drug cases that they needed his help with, cases worth tons of money, but, anyway, he couldn't find the rest of their steering committee. He'd already talked with Barry and Harry in New York and they were not worried about the Philo takeover. "Ackerman owns twelve million shares of its own stock, now worth at least fifty bucks a share but maybe more before the dust settles. The company just picked up six hundred million in equity alone. Plus, the government has to approve the merger, and they typically want the litigation cleaned up before saying yes. Also, Philo is notorious for avoiding courtrooms. They settle fast and quiet."

Sounds like Tarvan, Clay thought.

"Overall, it's good news," French said, with a fax buzzing in the background. Clay could see him pacing up and down in his Gulf-stream as it waited on the ramp in Beaumont. "I'll keep you posted." And he was gone.