Dentons’ CEO steps away and fired partner claims vindication

In June, a former Los Angeles-based partner sued Dentons US, claiming he was fired for blowing the whistle on a forgery scheme involving the firm's chief executive officer to collect contingency fees without client authorization. Then last week, the firm said the CEO, Mike McNamara, would step away from his leadership role.

The firm denied any connection between the fraud allegations and McNamara's move.

"Mike stepping down as CEO had no relation to the Zhang suit," Chicago partner Keith Moskowitz said in an email.

But the attorney for Jinshu "John" Zhang, the fired partner, saw it otherwise.

"When we filed this case 45 days ago, Dentons went on a PR campaign to say how our allegations were frivolous, and there was nothing to them, and our demands that Mr. McNamara step down and be terminated were malicious and mean-spirited," Paul Murphy of Murphy Rosen in Santa Monica said Wednesday. "Turns out, 45 days later, he's now been removed, and they have no succession plan. It's clear this was done without any advance notice. The question becomes why?

"I think the answer is because of the exact allegations that we've been talking about," Murphy continued.

Dentons, with 12,000 lawyers in more than 200 offices in 80 countries, is generally regarded as the largest law firm in the world.

McNamara will stay on as a firm partner in Washington, D.C. as Dentons' board implements a new leadership structure, the firm said in a statement Friday. Moskowitz will assume the role of chairperson of Dentons US Board; San Francisco partner Sonia Martin and Washington, D.C. partner John Holahan will take on the roles of vice chairperson; and Mary Wilson will continue in her role as Dentons US managing partner and her role on the US Region Board.

Zhang claimed in his wrongful termination lawsuit that McNamara and the firm's general counsel forged a document attempting to transfer certain client-held securities directly to the firm without client-authorization. Dentons called Zhang's allegation of forgery "an utter fabrication" in an email sent after the lawsuit was filed.

Murphy continued Wednesday to accuse McNamara of wrongdoing.

"He took actions that he shouldn't have taken, and he oversaw those actions. We view this as a complete vindication of what we've been saying all along," Murphy said. "John's allegations are meritorious; they should have been investigated from the very beginning."

While the timing and circumstances regarding Zhang's firing remain disputed, both sides allege a conflict arose relating to how a $34 million contingency fee award should be divided.

Zhang said after learning McNamara had forged a client document in an effort to funnel the contingency fee directly to Dentons, he reported the alleged scheme to the governing board in May, demanding McNamara be terminated .

"Days later, without even interviewing Zhang, the board retaliated against him by wrongfully terminating his employment and immediately commencing an arbitration against him for supposedly breaching the partnership agreement," the complaint reads.

Dentons tells a different story. Represented by Los Angeles attorney Joseph N. Akrotirianakis of King & Spalding LLP, Dentons said Zhang was fired after he "went around the firm" and attempted to enter into an improper fee agreement with a client from the People's Republic of China after Zhang successfully negotiated the enforcement of a multimillion-dollar arbitration award. Only after Dentons refused to grant him 85% on the contingency fee award did Zhang respond with "slanderous and false allegations" against the firm's leadership, according to Dentons.

One of the remaining questions is whether the dispute will be heard in the employee-friendly state of California or the employer-friendly state of New York. Dentons wants to take the lawsuit to an arbitrator in New York while Zhang wants it heard before a superior court judge in Los Angeles.

A hearing to decide arbitrability and venue is scheduled for July 13 in Los Angeles. Jinshu "John" Zhang v. Dentons U.S. LLP., 21STCV19442 (L.A. Sup. Ct., filed May 26, 2021).