December 1st, 2017

Cellino & Barnes Divorce Gets Uglier

Sometimes a divorce is amicable. The divorce of Cellino and Barnes, however, is not one of those times.

Back in May I wrote how this large personal injury firm — based in upstate New York but expanded not only to downstate but out to California as well — had collapsed. Some told me privately that I was jumping the gun, and that collapse was too strong a word for this fight.

I speculated back then that the two main reasons for a firm of this size to collapse were money and ego. It appeared to me at the time, based on press accounts and court filings, that Stephen Barnes had already crossed the Rubicon and that there was no going back in his relationship with Ross Cellino, Jr.

And now we see this from the Buffalo News:

Money continues to roll in by the millions of dollars — but there’s no harmony between battling law partners Ross M. Cellino Jr. and Stephen E. Barnes.

On Tuesday, Barnes accused Cellino of trying to burn the Cellino & Barnes law firm “to the ground,” regardless of how many employees are hurt.

But if you think burn to the ground is harsh language, it doesn’t compare to this Barnes comment that comes in legal filings over whether a receiver should be appointed to resolve deadlocked issues regarding the dissolution of the firm. As per Barnes , Cellino said:

“I don’t give a f–k, I will burn the place to the ground and start over with one lawyer. I have the resources. F–k it, f–k Steve and f–k Daryl. Let all these f–king lawyers spend the next 20 years with Steve”

On the flip side of this nastiness is Cellino’s allegation in a November 29th affidavit that Barnes has already set up his own competing law firm and has used Cellino and Barnes assets/personnel to assist in doing so.

The TV and radio ads continue, by the way with an astounding $4.6 million spent from in 2017 through the end of November. In that same Cellino affidavit, he says that it makes no financial sense to continue spending money on a brand that will soon cease to exist. And they spend about $65,000 per month on pay-per-click advertising.

That’s a lot of money, in case you were thinking of following in their footsteps. But remember that money doesn’t buy happiness.

An old proverb states that hell hath no fury like a woman scorned. I’m not sure why that’s limited to women, however, as the emotions related to betrayal, ego, rejection, insult and revenge are all very powerful and cause people to do crazy things. That happens in relationships both personal and business.

This fight, with over 200 documents filed already, won’t be ending soon (or happily).

May 11th, 2017

Cellino and Barnes Collapses (Updated)

Cellino and Barnes, perhaps New York’s largest personal injury firm, collapsed yesterday. Ross M. Cellino Jr. brought an Order to Show Cause asking why the firm should not be dissolved. The Buffalo based firm – fueled by a massive multi-million dollar advertising and marketing budget — expanded in recent years to open offices around New York and now in California.

Cellino’s partner, Stephen Barnes, is scheduled to respond in court on May 19th to the petition for dissolution of the firm. Details of the reason for the collapse will most surely come out in the lawsuit, along with accusations of some kind as between the two.

At stake in the suit are potentially thousands (tens of thousands?) of injured clients, whose cases now face the prospects of chaos, delay and disarray. It could be years before the entanglements of the two are sorted out, as issues involving its very expensive phone number (all 8s), marketing campaign (and jingle) and leases are sorted out while the lawyers jockey over how to manage the clients.

(Not all of its advertising revolved around its hokey jingle.)

The dissolution will also have to deal with potential future business — notwithstanding the disarray — and that such business was generated by the years-long marketing campaign.

Most assuredly, lawyers at the firm are now contacting high-value individual clients in efforts to persuade them to stay at one of the new firms bound to be birthed from the tumult and pandemonium that is likely taking place.

The firm currently has 70+ lawyers listed on its website — not large by BigLaw firms but ginormous in the personal injury field where firms of 1-5 attorneys are most common.

But it isn’t as if those lawyers can simply divvy up the clients — for it is the clients that get to choose the lawyers. If clients do not believe they’ve been treated well with personal attention in the past, they may flee the firm altogether.

Both Cellino and Barnes have a checkered history, notwithstanding their success in building their mega-firm. In 2005 Cellino was suspended from the practice of law for six months while Barnes was censured. (In re Cellino)

The two of them had, in violation of the Rules of Professional Conduct, advanced loans to numerous clients. Part of this was having a relative set up a high interest funding company for clients, and then directing clients to that funding company without informing them of the relationship.

Barnes was also cited for ambulance chasing (“Barnes sent a letter to a hospitalized surgical patient and concluded that such conduct was an impermissible solicitation of legal employment in violation of Code of Professional Responsibility.”)

My speculation: There are two main reasons for a law firm to dissolve — money and ego. So the leading contenders are that there are financial problems of some kind lurking in the background, or that Cellino (or Barnes) feels he deserves a bigger piece of the pie for some reason. Time will tell.

This story is one to follow given the inevitable problems that will result in the dissolution of a firm with thousands of clients.
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Update (5/12/17)– As per the Buffalo News, the dissolution issues started when Cillino wanted to hire his daughter, a recent SUNY Buffalo law grad, and Barnes said no:

Cellino went to Stephen E. Barnes in 2015, asking that the law firm hire his daughter, Jeanna Cellino, a cum laude graduate of the University at Buffalo School of Law, one of the sources said.

“Steve said absolutely not,” the source said, adding that the disagreement became a major bone of contention between the firm’s two founders.

In addition, there are apparently issues over finances (no great surprise):

Some disputes over finances in the law firm also are part of the disagreement that prompted Cellino to file a lawsuit against his own law firm this week, seeking to dissolve the Cellino & Barnes law firm, the legal sources said.

There’s also a short quote from me in the story coming off of this blog.

And from the NY Post comes a confirmation of sorts from the comments about Barnes wanting the California business and Cellino wanting New York:

Barnes wants to focus on the California end of the business, Cellino wants the East Coast, and the partners simply want a judge to referee the complicated split, [Cellino’s father] said.

But the scuttlebutt around the Buffalo personal-injury and defense pubs is that Cellino Jr. — a minority partner in the firm’s San Francisco and Los Angeles offices — is feuding over money with Barnes, who has already moved to the West Coast.

This, of course, doesn’t explain why the split isn’t amicable.

November 10th, 2009

Lawyer Advertising, Hockey & Iraq (And Budweiser)

Traditional lawyer advertising may be branching out in very nontraditional ways. The Buffalo-based personal injury firm of Cellino & Barnes is known for its very extensive advertising campaign in western New York, with billboards and TV commercials galore (as well as ethics troubles, Matter of Cellino).

But in trying to make inroads downstate, they’ve invaded one of the local hockey arenas: The Nassau Coliseum. And they’ve done it by sponsoring a welcome home message for an Iraqi war veteran, not the type of advertising NY metro area residents are accustomed to, since we usually see subway ads, radio and TV.

My Nassau County Bureau Chief, a personal injury guy, reported to me last week to me that he saw this at a recent Islanders game:

Last night at the Islander game — best personal injury lawyer advertising I’ve ever seen. Between the second and third period. Flashed on the screen is “Home from Iraq.” White army style jagged edge lettering with a couple of army stripes on a military green background. Announcer announces back from Iraq is the American hero. The soldier, at the game, is flashed on the screen and waves to the crowd. The screen pans back to the Home from Iraq lettering and in smaller letters in the lower right hand corner is “Cellino & Barnes.”

Was the advertisement effective? Well, this was the response:

This got a bigger round of applause than the Islanders on their way to their fourth straight win of the season. Those guys know what they’re doing.

I have mixed thoughts on this. We start with the premise that the vast majority of ads for personal injury attorneys suck, and consist of “If you or someone you know has been injured…” types of blather. It’s damaging to the profession and damaging to the clients, a fact that can only be appreciated when picking a jury and watching eyes roll when you tell them it’s a personal injury case. So any ad that doesn’t come within that wretched format is, by definition, a better ad. The bar for quality is set very low.

From there you move on to the issue of whether this is a cynical exploitation of our troops. But this type of tribute doesn’t appear to be any different in concept from the Super Bowl ads run by Anheuser Busch in 2002 with Clydesdales walking across the Brooklyn Bridge and going down on one knee before the skyline of New York, or its 2005 ad of troops moving through the airport to the applause of bystanders.

On the whole, even with the cynicism in my mind regarding exploitation, I’d have to say that this is effective advertising. It doesn’t say anything about the skills of the attorneys, of course, but nor do the Anheuser Busch ads tell you what Bud tastes like.