Paul Ceglia has filed a new court complaint, and it’s full of old e-mails that are supposedly Mark Zuckerberg’s. If they’re real, the company now has a lawsuit on its hands that won’t go away easily-one that could be just as damaging as the years-long litigation with the Winklevosses (which now appears resolved). But if they’re fake-and Facebook insists they are fake-the heat isn’t going to just fall on Ceglia, a wood-pellet salesman and convicted fraudster. It’s going to fall on DLA Piper, one of the world’s largest law firms.
The entry of the DLA Piper law firm into this case is a big change. It would be one thing if Ceglia’s amazing claim-that he’s entitled to essentially half of Zuckerberg’s wealth-was being brought by a country lawyer from a small town in upstate New York. That’s not the case. Business Insider is asking its readers: “How reputable is DLA Piper?” Here’s the answer: DLA has 1,167 lawyers and gross revenue of just over $1 billion in the U.S., according to American Lawyer’s most recent annual survey. It’s the 13th largest firm in the U.S., and its partners are some of the richest in the legal industry; the firm pulls in a stunning $1.38 million in profit for each partner. Worldwide, the firm has more than 3,000 lawyers and close to $2 billion in revenue. Law firms simply can’t rise to that elite level without maintaining stellar reputations.
DLA Piper does significant work in the tech sector, and says it has worked with more than half of the Fortune 250. If the firm is found to be representing a fraudster with outrageous claims against Facebook, the reputational damage could be severe. If these e-mails are bogus, this lawsuit is going to end up looking like nothing more than a shakedown attempt-albeit an incredibly bold one. Other tech companies might be reluctant to hire a law firm that associated itself with a fraudulent attack against one of their own.
The firm has told the press it did “weeks” of due diligence, including an analysis of the contract Zuckerberg signed. It said that contract wasn’t doctored. “We did a lot of homework into this matter,” one of the DLA Piper lawyers on the case told The New York Times. “We would not risk our reputation and time in getting involved in a matter we didn’t believe in.”
The firm’s due diligence had better be ironclad. These emails aren’t just evidence in one man’s court case; if real, they’re going to become part of the larger “origin” story of Facebook. If it turns out to be a fraud, one of the world’s biggest law firms will have more than egg on its face.
For a case like this, a law firm as large and bluechip as DLA Piper should be doing FBI-level forensics. Every major law firm today has serious computer-analysis abilities; in the past decade or so, e-discovery has become its own industry within litigation. The question is whether the prospect of a payout that could range into the tens or even hundreds of millions caused the firm to lessen its standards. (The firm is almost surely taking this case on a contingent-fee basis, in which it will pocket a proportion of any settlement or verdict money.) It would have been pretty interesting to be a fly on the wall when DLA Piper’s partners were discussing whether to take this case. I contacted two DLA Piper lawyers to ask about how they vetted the case but didn’t hear back.
The risk for Facebook? Facebook has flat-out called them fakes. That’s a piece of knowledge that could seemingly only come from Zuckerberg himself, or his old hard drives. If the company is engaged in a cover-up here, it’s a very foolish one, which could wind up giving more credence to a man who is asking-and it’s still hard to believe as I write this-to take half of Mark Zuckerberg’s wealth.