Dentons has become embroiled in a multi-front legal battle with former partner and longtime Big Law China practitioner Jinshu (John) Zhang, according to federal court documents filed this week, after Zhang and the global mega-firm clashed over client fees.
Zhang, in a lawsuit filed last month in California state court, claims he was fired by Dentons for blowing the whistle on the firm for allegedly using forgery to obtain millions of dollars from an unnamed Chinese client.
But Dentons and its lawyers at King & Spalding levelled their own allegations against Zhang in federal court papers on Tuesday, asserting he was fired because he diverted 85% of a contingency fee, including stock, to himself. The firm claims Zhang's lawsuit, which came in the midst of ongoing arbitration proceedings with the firm, belongs in the U.S. District Court for the Central District of California.
In a statement to Reuters Wednesday, a Dentons spokesperson said Zhang misled his partners and called his allegation of forgery "an utter fabrication."
"Zhang's slanderous accusations and misleading attempts to falsely portray himself as a whistleblower, tellingly made only after Dentons directly confronted him, are as outrageous as they are untrue," the spokesperson said.
Zhang has been a partner at major law firms for two decades and led the China practice at Greenberg Traurig before joining Reed Smith in 2008, according to legal media coverage. He joined Dentons in 2014, his LinkedIn profile says.
Beginning in 2018, Dentons said in its Tuesday filing, Zhang and the firm represented a China-based client who sought to enforce a foreign arbitral award in China, resulting in a multi-million dollar settlement for their client.
Zhang alleged that Dentons, at the direction of its U.S. CEO Michael McNamara and general counsel Edward Reich, forged a document that would have transferred millions of dollars from the client. Zhang alleged he took action to protect both the client and Dentons' reputation and demanded that the firm fire McNamara.
Instead, Dentons fired Zhang, justifying the move with "made-up or make-weight arguments", his lawsuit alleged.
Dentons' filing on Tuesday tells a very different story. The firm says that, after it turned down Zhang's request to receive a lion's share of the client's fee, Zhang went behind the firm's back and negotiated with the client directly, receiving "85% of the proceeds of the shares of stock due to Dentons."
Dentons also alleges Zhang was "secretly exfiltrating sensitive and confidential information" from the firm shortly before he was fired on May 5.
After his dismissal on May 5, Zhang and Dentons entered into arbitration with the International Institute for Conflict Prevention & Resolution. Dentons alleged Zhang stopped participating in the arbitration process after he lost a ruling; Zhang in his lawsuit said he withdrew because the arbitrator gave him no time to reply to matters. He said he also objected to the secretive nature of the arbitration proceedings.
"This case is about what Dentons has done, and they’re trying to run to arbitration and try to keep everything secret," said Zhang's attorney Paul Murphy, a founding member of Santa Monica, California-based Murphy Rosen. He said they will file an injunction to halt the arbitration proceedings so that a court can determine whether arbitration is the proper venue to hear Zhang's claims.
The case is Zhang v. Dentons US LLP, U.S. District Court for the Central District of California, No. 2:21-cv-04682.
For Zhang: Daniel Csillag and Paul Murphy, of Murphy Rosen LLP
For Dentons US, Michael McNamara and Edward Reich: Joseph Akrotirianakis, Patrick Collins, Patrick Otlewski and Brian White of King & Spalding
