Be Careful When Hiring Celebrity Lawyers

Be Careful When Hiring Celebrity Lawyers
Michael Avenatti Booking Photo (courtesy of Twitter)

Beware Celebrity Lawyers

Many people are attracted to celebrity lawyers just like they are to celebrities. There is a certain amount of bragging rights to say that you are represented by a lawyer who is seen as a celebrity and is always on the news. While there are many good lawyers who represent celebrities, beware of the lawyers who spend too much time trying to be celebrities themselves.

Michael Avenatti (Stormy Daniels & Donald Trump)

Michael Avenatti is a celebrity. He represented Stormy Daniels, toyed with running for President and thought he could take down Donald Trump. In March of this year he was arrested for extortion in New York. The next day he was charged in Los Angeles with a 197 page complaint alleging wire and bank fraud. Clients say he stole money. His crash from stardom has been nothing short of spectacular.

Since this post was first written, Avenatti has been convicted of using client information in an effort to commit extortion. A unanimous jury convicted him in February 2020. Manhattan's United States Attorney had this to say about Avenatti:

“Michael Avenatti abused and violated the core duty of an attorney – the duty to his client.  As alleged, he used his position of trust to steal an advance on the client’s book deal.  As alleged, he blatantly lied to and stole from his client to maintain his extravagant lifestyle, including to pay for, among other things, a monthly car payment on a Ferrari.  Far from zealously representing his client, Avenatti, as alleged, instead engaged in outright deception and theft, victimizing rather than advocating for his client.”

He has not yet been sentenced and has yet to go trial on his other cases. 

Tom Girardi (Real Housewives of Beverly Hills)

But Avenatti isn’t the only celebrity lawyer to take a big fall. A Beverly Hills power lawyer was sued last week for defaulting on a multi-million loan.

Many in California know Tom Girardi as a high profile personal injury lawyer. In social circles, he is known for his marriage to “The Real Housewives of Beverly Hills” star Erica Jayne. Today, a funding company is calling him a deadbeat.

In a lawsuit filed on May 24th, Stillwell Madison LLC says Tom Girardi and his law firm Girardi & Keese defaulted on a $5.1 million loan.

A lawsuit over a loan default is hardly news. What the lender says about Giradi, however, is newsworthy. Ditto for the fact that a law firm that markets that it has recovered more than $10 billion in verdicts and settlements. Why does such a successful law firm need to borrow money?

Keep reading!

According to the lawsuit, Girardi and the Girardi & Keene law firm borrowed $5.1 million in April 2016 for business purposes. As lawsuits would settle, the firm was supposed to pay down the loan.

Things went well for about two years. In August of 2018, Girardi said he needed more time to pay. The lender, Stillwell Madison, says that instead of applying law suit recoveries to pay down the loan, Giradi personally took the money to support he and his wife’s “lavish lifestyle and maintain their glamorous public image.”

Worse, Stillwell Madison says that the law firm was in default of another loan, a default that the Girardi’s firm hid from them. As of May, 2019, Stillwell Madison says it is still owed $3.4 million.

Defaulting on a loan is bad enough but the lender claims that Girardi’s false statements, misuse of the loan proceeds and hiding the other default is fraud. Under Arizona loan, if the lender can prove fraud, it might be entitled to punitive damages as well.

Meanwhile, the other lender, the Law Finance Group, is suing Girardi for $15 million. Girardi calls that lawsuit “fraudulent, slanderous and an abuse of the legal process.”

Celebrity New Worth says Girardi is worth $30 million. His apparent inability to pay two loans suggests to us that he is broke.

Since this post was originally written two years ago, things have only gone down hill for Girardi. In December 2020 a federal judge found cause to believe that he stole millions of dollars from clients. In freezing Girardi's assets, the court found that his actions were "unconscionable." The case was referred for criminal investigation. That same month Girardi was forced into involuntary bankruptcy.

The similarities between Girardi and Avenatti are troubling. Both are brilliant men but have their egos caused them to dig such a deep hole that even they can’t dig out? Time will tell. We remind everyone that an indictment or an allegation in a lawsuit is just that. Things appear bleak for both men but both are presumed innocent of any wrongdoing.

Should I Hire a Celebrity Lawyer?

The answer to this question is more nuanced than a simple “yes” or “no.” I know plenty of celebrity lawyers and everyone honorable. I might not always agree with their beliefs or clients but they are honorable people.

What worries us is celebrity status combined with arrogance and living an overly lavish lifestyle.

Want another example? Look at Scott Rothstein, once managing partner of Rothstein Rosenfeldt Adler, a high profile law firm with 70 lawyers mostly based in Ft Lauderdale and Miami.  Today he is serving a 50 year prison sentence after being convicted of stealing hundreds of millions of dollars from lenders, investors and even clients.

Rothstein was arrested in 2009 but the year before in an interview he said,

“This is where the evil happens. Look, I sleep in the bed I make. I tend toward the flashy side, but it's a persona. It's just a fucking persona. ... People ask me, 'When do you sleep?' I say I'll sleep when I'm dead. I'm a true Gemini. I joke around that there are 43 people living in my head and you never know what you're going to get. There are some philanthropists in there, some good lawyers, and I like to think some good businessmen. There are also some guys from the streets of the Bronx that stay hidden away until I need them. Does that sound crazy? I am crazy, but crazy in a good way.”

And just like Avenatti and Girardi, Rothstein certainly lived an opulent lifestyle. In addition to having 28 city police officers on his payroll for personal protection, he also collected “toys”. Those included a Boeing 727 jet, an 87-foot yacht four Ferraris, a Bentley, a Rolls Royce, three Lamborghinis (worth $400,000 a piece) and two Bugattis worth $1.6 million.

That kind of spending becomes a disease to some. And despite all their brilliance as lawyers, their moral compass fails.

It feels good to have a celebrity lawyer. Everyone loves the bragging rights to say my lawyer is such and such. It is obviously better to have both a highly competent lawyer and one who is honest.

Harking back to my earlier caution that Avenatti and Girardi have only been accused of wrongdoing at this point, assuming they have done wrong, how will victims get paid? That's where things get tricky. Taking client funds isn't legal malpractice, it is theft. Unfortunately for clients, malpractice insurance does not cover criminal behavior. 

Our primary concerns are always the clients. Assuming both men are convicted of taking client funds, how will the clients get paid? Unfortunately, we doubt they will ever see all of their money.

Whenever a lawyer owes almost $20 million and has no apparent ability to pay, that causes us to worry. Whenever a client seems more interested in appearing on reality TV shows or making wild claims to the media, we worry. And a lawyer that needs 11 ultra high end luxury vehicles? We worry and you should too.

Desperate people sometimes do desperate things. And maintaining the lifestyle that Avenatti, Girardi and Rothstein maintained requires a lot of money. It looks like their lifestyle was fueled with money taken from clients.

Before being blinded by a lawyer’s celebrity status, make sure he is also honest. It also pays to consider whether they are deeply in debt. In each of the cases above, there were ample warning signs. Unfortunately, some clients didn't see them in time.

To learn more about legal malpractice, visit our legal malpractice page. Ready to see if you have a case? Contact us online by email [hidden email] or by phone at 877-858-8018. All inquiries kept confidential and protected by the attorney – client privilege.

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