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A law firm's bitter breakup laid bare

Ex-partners at Donovan Hatem sue old boss, but he says they just want to destroy a rival

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Email|Print| Text size + By Sacha Pfeiffer
Globe Staff / March 5, 2008

They call him "psychologically abusive."

He insists their "venomous attacks" and "reckless hyperbole" are motivated by greed and personal vendettas.

They say they were appalled by his "fiscal and executive mismanagement" and "reckless and wasteful spending."

He dismisses their accusations as "baseless and defamatory."

It's the kind of overheated language that often has aggrieved parties hiring lawyers. But in this case, lawyers themselves are making the angry allegations. And their dispute is detailed in a tell-all lawsuit that lays bare an ugly business divorce, the kind usually settled behind closed doors.

The case, which goes to arbitration this month, involves the acrimonious breakup of the founders of Donovan Hatem, a 50-lawyer Boston law firm. Nine former partners have sued the firm and founder David J. Hatem, whom they describe as jealous, tyrannical, and dictatorial, claiming they are owed a collective $2 million in unpaid compensation.

The lawyers, who left the firm last summer to open a new Boston firm, LeClairRyan, accuse Hatem of manipulating the firm's finances to prevent them from be ing fairly paid. They also allege he wrote off bills for favored clients, spent lavishly on marketing to promote mainly himself, and wasted money on first-class travel that he billed to the firm rather than to his clients.

In legal filings, Hatem has lashed back, arguing that his former partners are trying to humiliate and destroy a firm with which they now compete. He accuses one of them of billing Donovan Hatem for New England Patriots season tickets that went to clients of their new firm, and says the incompetent legal work of two others resulted in a pending malpractice allegation that could cost Donovan Hatem $50,000.

"This is all very much about Mr. Hatem not wanting to pay his partners," said Warren D. Hutchison, a plaintiff in the lawsuit who had worked with Hatem for nearly 20 years. "He really considers nobody of any value other than himself, and he was incapable of recognizing the worth in his former partners."

Hatem's lawyer, Michael E. Mone, did not return a call. But in legal documents, Mone asserts the plaintiffs sued "to embarrass and harm their former partners, particularly Mr. Hatem," and calls their case "an outrageous and salacious effort to leverage a quick payment of money to which they are not entitled."

A call to Hatem was returned by Andrew M. Paven of O'Neill and Associates, a Boston public relations firm. In a statement provided by Paven, the firm described the suit as "baseless and defamatory."

Donovan Hatem was established in 2001 by John A. Donovan Jr., who died of cancer in 2005, and Hatem, who specializes in representing architects, engineers, construction firms, and the companies that insure them. Both men left the Boston firm Burns & Levinson to launch their practice, taking 38 other Burns & Levinson lawyers - a third of the firm - with them.

In the local legal community, Hatem, 55, is widely regarded as a combative personality whose aggressive style is valued by his clients but can be trying for his colleagues. When Hatem launched his own firm, according to his former partners Hutchison and A. Neil Hartzell, his abrasive nature was moderated by Donovan, whom Hartzell describes as "a wonderful person who was a balancing force to David." After Donovan died, Hatem began to exhibit "increasingly tyrannical and abusive behavior," according to the suit.

"He'd sit in meetings berating people, he'd walk out of partnership meetings if he didn't get his way, he'd send memos that would go on and on and on insulting people," Hutchison said. "He was a standard textbook abusive boss."

In a statement, Hatem - a longtime lawyer for Bechtel/Parsons Brinckerhoff, the project manager for the Big Dig - had this reply: "If there were times of tension between us, it was over deficient client service or work product."

The plaintiffs also allege Hatem became more controlling of the firm's finances in Donovan's absence and began manipulating financial records to conceal profits. They were especially alarmed when he announced in April 2007 that finances were so precarious that - despite some partners billing nearly 3,000 hours a year - they may not be paid that month, according to the suit.

"I was appalled by what was going on there," said Hartzell.

In July 2007, nine partners and two senior lawyers left Donovan Hatem to open a Boston office of LeClairRyan, a firm based in Richmond, Va. They were later joined by seven Donovan Hatem associates.

In December, the nine former partners sued Donovan Hatem in Suffolk Superior Court, claiming they are owed $2 million. They have not specified how much they are individually owed; amounts vary depending on how much they contributed to start the firm. In the suit, they blame Hatem's "extravagant and excessive lifestyle and travel," some of which they claim he billed to the firm's marketing budget, as contributing to Donovan Hatem's financial woes.

Mone, Hatem's lawyer, states in legal replies that "there was no fraud or any other malfeasance." He also accuses the departed lawyers of launching a "shameless public smear campaign" in a "bald-faced effort to disrupt, and perhaps destroy" Donovan Hatem. The firm says its finances have been reviewed by an accounting firm that found no problems.

Since attempts to resolve the suit in mediation failed, a resolution will be decided by an arbitration panel that will hold a preliminary hearing March 14.

"All we're looking for is fair compensation for what we contributed to the firm and what was denied us while we were there," Hutchison said. "This isn't just a dispute over someone who took more money than he should have. This is about someone not wanting to share."

Sacha Pfeiffer can be reached at pfeiffer@globe.com.

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