Buyer Beware: Firms Look Closely at Legal Liabilities of Merger Partners

Former Gardner Carton & Douglas partner Steven L. Loren, who pleaded guilty to a criminal felony over representation of a firm client, left the firm before its 2007 merger with Drinker Biddle & Reath. But that didn't stop Drinker Biddle's name from appearing on a lawsuit filed last month against Loren, Gardner Carton and others over an alleged kickback scheme. Drinker Biddle isn't alone in facing litigation stemming from an acquisition, which is why legal liability due diligence has become part of firms' merger process.