A disagreement over the proposed hiring of Ross M. Cellino Jr.’s daughter was one of the factors that ignited a feud that could lead to the breakup of the Buffalo law firm, three legal sources with knowledge of the firm’s workings told The Buffalo News.
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.
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.
“As I understand it, the argument over Cellino’s daughter was the initial rift between these two men,” added another Buffalo attorney who has close ties to Cellino & Barnes. That was confirmed by a third attorney, who said he talks regularly with members of Cellino & Barnes. All three agreed to talk on the condition that they remain anonymous.
Barnes intends to “aggressively oppose” Cellino’s efforts to dissolve the firm, according to a statement that the firm issued late Thursday. But so far, no one associated with the firm has discussed the reasons behind the lawsuit.
“In response to recent legal action and media reports regarding the ongoing ownership structure of our firm, we want to assure our employees, our clients and our business partners that Cellino & Barnes continues to operate around the clock in a fully functional manner,” said Cellino & Barnes spokesman Shawn Kline.
But a lawyer who is supportive of Cellino in the lawsuit denied that the discussions over Jeanna Cellino had anything to do with the legal dispute.
“Ross Cellino was very unhappy with the management and direction of the firm,” said this attorney, who also spoke on the condition of anonymity.
Kline, Barnes, Cellino and Jeanna Cellino all declined to respond to email and telephone messages seeking their comment on what touched off the dispute. Attorney Terrence Connors is representing Ross Cellino in the dispute.
The lawsuit appears to point the Buffalo law firm – with its ubiquitous advertising jingles and billboards – toward a nasty breakup.
“If this goes forward, it’s going to be like a divorce … a very nasty business divorce,” attorney Paul J. Cambria said. “They ultimately may have to split up all the assets of the firm – including the offices, the phones, the files, the jingles and all the cases in the pipeline.”
Even ownership of the law firm’s easy-to-remember telephone number – 888-8888 – would be one of the assets that Barnes and Cellino could battle over, Cambria said.
State Supreme Court Judge Deborah Chimes sealed court papers detailing the reasons for the lawsuit, but lawyers were buzzing about the situation.
“This is going to be the biggest story of the decade in the Buffalo legal community,” said Buffalo business attorney William F. Savino.
He said he was surprised to hear that Cellino filed the lawsuit.
Known for its ads and jingles, endlessly repeated on radio and TV commercials, the firm has thousands of clients, 300 employees and 71 lawyers in nine offices, with locations in Buffalo, Rochester, New York City, Long Island, Los Angeles, San Francisco and Oakland. On its website, the firm says it has obtained more than $2 billion in settlements and verdicts for clients over the past 30 years.
The law firm specializes in pursuing big money verdicts for people who are injured in car accidents, industrial accidents, slip-and-fall accidents, airplane crashes and other calamities.
“When you consider that most personal law firms have anywhere from one to five attorneys, a law firm with 70-plus lawyers is huge. Cellino and Barnes may be the biggest personal injury firm in the state, and one of the biggest in the country,” said Eric Turkewitz, a New York City lawyer who publishes a blog focusing on personal injury law. “What happens to their thousands of clients, possibly tens of thousands, when this firm breaks up?”
Savino and several other attorneys told The Buffalo News that the disagreement must have become serious to upset Cellino to the point that he would file a lawsuit, rather than finding some amicable way to settle financial accounts with his longtime partner.
“This is baffling,” Savino said. “This is like a Pearl Harbor attack on your own law firm. In most situations like this, where two law partners are at an impasse, they get together and say, ‘OK, let’s work something out and divide up the assets.’ When you file litigation in a situation like this, there are all kinds of pitfalls. You risk putting all your dirty laundry out for everyone to see in a public proceeding, and you ultimately will be giving a judge the power to break up the business and distribute the assets. Most people would rather work something out in an amicable manner.”
One of the things that is not known is whether Barnes and Cellino are 50-50 partners, or whether one of the partners owns more assets than the other. If they are not equal partners, splitting up the assets could become very difficult, said Savino, who has been involved in litigating many such business disputes.
This is not the law firm’s first controversy.
In 2005, a five-member panel of the Appellate Division of State Supreme Court in Rochester disciplined Cellino & Barnes for advancing money to clients through a company they owned, and then through another company they set up through Cellino’s cousin. Cellino also was disciplined for filing a false retainer agreement.
The judges on the panel said they weighed Cellino’s unblemished record and Barnes’ single caution in the choice of penalties. Cellino was suspended from the practice of law for six months and Barnes was censured.
While Cellino was suspended, the firm temporarily changed its name to “The Barnes Firm.”
Some lawyers described the firm as innovators for its advertising.
“One thing you have to say for them, Cellino & Barnes started advertising for clients on TV and in other media when other attorneys looked down their nose at advertising,” one Buffalo attorney said. “They were the first to really start doing it. Now just about everyone does it.”
The law firm has given money to many local charities. In 2009, the firm donated $1 million to UB Law School, one of the largest cash gifts in the law school’s history. In 2011, a conference center at the law school was dedicated in the name of the firm.
One former Cellino & Barnes lawyer referred to the firm’s “golden age,” when its massive advertising campaign kicked in and millions of dollars worth of cases resulted. But some of the phones stopped ringing following the Cellino suspension, the lawyer said, and those heady days never returned.
Other firms like William Mattar began copying the Cellino and Barnes model with similar amounts of television and radio advertising.
Work conditions also changed, the lawyer said, adding several top attorneys left the firm, taking millions of dollars in business with them.
After the successful early years, this attorney said, employees had to deal with surveillance cameras and employment contracts. Compensation formulas changed, and the Buffalo and Rochester offices became “afterthoughts” as the firm started concentrating on its offices in Manhattan and Long Island, and eventually, California.
Cellino & Barnes remains successful, another lawyer said, but the circumstances buoying its early days changed.
Factors such as safer automobiles and their air bags, tougher law enforcement, a greater overall emphasis on safety and a glut of personal injury lawyers entered the picture, the attorney added.
Challenges of breakup
Amherst-based trial attorney Christopher J. O’Brien noted that breakups of legal partnerships pose tremendous challenges even when amicable. A long-time partner of attorney Steve Boyd, O’Brien said the dissolution of O’Brien and Boyd several years ago worked because the principles were, and are, close friends.
“We recognized that our life goals changed and wanted to spread our wings,” he said. “We never even signed an agreement. Steve’s word was good with me.”
But O’Brien said he “shudders to think” of the results of a messy law firm divorce.
“My hope is these two very talented lawyers can get to that point,” he said, referring to his experience with Boyd. “It can be hard, especially with the size of a shop on their scale.”
Boyd now runs a law firm with partner John V. Elmore, and Jeanna Cellino works there as an attorney. Boyd and Jeanna Cellino did not return calls Thursday seeking their comment, and an employee at the firm said Elmore was tied up with a trial.
“Jeanna has been representing injured Western New Yorkers for five years,” the Boyd and Elmore firm states on its website. “She has obtained notable results for her clients and is a member of the Million Dollar Advocates Forum – an organization that includes many of the top trial lawyers in the United States and is limited to trial attorneys who have achieved million and multi-million dollar verdicts and settlements."
One Buffalo attorney, who said he respects both Cellino and Barnes, voiced the opinion that the two men will be making a huge mistake if they cannot iron out their differences.
“If I was making the money those guys make, I could stay partners with the devil,” the attorney said.