Photo by Justin Clemons.
It’s tough to find a newly-formed plaintiff’s firm that’s achieved greater success in the last decade than Austin-based Reid Collins & Tsai.
Founded in 2009, the firm soared past $1B in verdicts-and-settlements in its first few years, and has since tallied that much in 2015 alone. Among its victories is a $287.5M trial court judgment against Credit Suisse for defrauding investors in the Lake Las Vegas development. And while fraud and Ponzi schemes may draw much of the firm’s attention, they also devote substantial resources to professional malpractice disputes, bankruptcy trustee claims, cross-border litigation, and qui tam actions.
But what really sets them apart? They’re totally badass. And we think they represent the future of the plaintiff’s bar.
That’s the inescapable conclusion after spending time with the firm’s three founders: Bill Reid, Jason Collins, and Lisa Tsai. After spending years at larger institutions, this edgy, young group decided to build a trial firm that was true to the collective identity they’ve shaped over decades in other law firms, prosecution stints, and judicial clerkships: risk-taking, aggressive, and constantly on the hunt for sleeping dogs.
The three founders tried their first case together in 2005, and Bill and Lisa led the trial team that won a nine-figure victory against Credit Suisse last year. Together, they’ve developed practices overlooked by other firms, and created a feet-first style of case preparation that should be imitated everywhere. When they are considering a case, they work it up long before it’s filed and present it to the defendant with a ”pay now or suffer later” approach.
If that sounds mercenary, they’re not. They just embody a new style of law practice that is less old-boy and more results oriented – a true meritocracy. And no surprise, their clients love them, and their results speak for themselves.
Lawdragon: Can you describe how you came to found your firm in 2009?
Bill Reid: We all worked at a boutique firm before we formed Reid Collins & Tsai. I personally recruited Lisa and Jason to join our old firm. I recruited Jason out of University of Texas Law School. Lisa also graduated from UT Law, and spent some time at Latham & Watkins in Los Angeles before she decided to return to Austin. There came a point in time where we operated as a firm within a firm at our old shop, and so eventually we decided that we’d rather be in control of our own destiny.
Lisa Tsai: I like to say that we all grew up together in our law practice. I was just a baby lawyer when I decided to return to Austin, and little did I know that one decision would so dramatically change the course of my legal career. When I joined up with Bill and switched to plaintiff’s work, I felt like I had come home.
Plaintiff’s work just fits me and gets me up in the morning – maybe that is why I do not need coffee – and Bill has been my mentor and good friend every step of the way. Now a dozen years later, I get to live in a city I love and practice sophisticated and cutting-edge law with partners whom I deeply respect and admire on a national stage. Perhaps the best part is that we are all good friends, and we get to enjoy this law practice and our successes together.
LD: What were your motivations in starting your own firm after having careers with other practices?
WTR: Early in my career I worked at Hughes & Luce, a midsize firm, where I got a great deal of experience, but I wanted to be the lead lawyer and get real trial experience. So, in 1997, I quit and became an Assistant U.S. Attorney at the age of 29 and moved to Del Rio, Texas. After that, I knew I wanted to be a plaintiff’s lawyer and sprung at the chance to work at a boutique firm that had been formed by Hughes & Luce lawyers and former colleagues – mostly because they were willing to let me work in Austin, where I wanted to live and do plaintiff’s work.
LT: Oftentimes, people ask me why I was willing to leave the comfort and prestige of Big Law to join the ranks of a small plaintiff’s boutique. Although I really enjoyed and valued my time at Latham, as well as the summers I spent at other big defense shops, I think I always knew my highest and best use was elsewhere. When I began practicing with Bill and Jason, I found myself as a trial lawyer and never looked back. A few years later, it was a no-brainer to start a law firm together. I have no doubt in my mind that this firm and this practice were meant for me.
LD: Can you discuss some of the early challenges you faced in going out on your own?
WTR: We did not plan on opening our own firm, but over time our Austin-based team became self-sustaining. We were the most profitable group at our old firm and eventually it just made sense to go out on our own, rather than to remain a firm within a firm.
LT: Like anybody starting a new venture, we had no idea whether we would succeed or fall on our face. To say that our first office was a rat hole is generous. We used bankers’ boxes and a wooden plank to set up a conference table, and our attorneys had to share these tiny offices – where we literally could hear rats overhead. And for me personally, the timing was less than ideal – my first child was just six-months old, and I was still figuring out how to balance motherhood and work, much less run my own law firm. But somehow, the heavens parted, our clients took a leap of faith, brilliant associates joined us, and it has been an amazing ride ever since.
LD: What are the risks and rewards in building a plaintiff-side contingency business? What was the first “a-ha” moment when you knew you had made a great decision?
WTR: When we formed our firm, we had a totally contingent-based practice. We had no idea if any of our clients would follow us to a start-up law firm based in Austin, which is not a logical base for the cases that we do. Although we started with nine lawyers, we were able to get many of our clients to follow us to the new firm. We soon grew to 15 lawyers and got our first contingency pop in April 2010 and another in October 2010. We were worried about the change in platform, but we realized that it was our relationships not our platform that mattered most to clients. By October 2010, we kind of knew we were off to the races.
LT: I think one of the common traits we all share is that we enjoy taking calculated risks alongside our clients. Not only does it make good economic sense, but it just makes it more fun to practice law. We are literally invested in our cases, and everybody at our law firm knows that we only succeed when our clients succeed.
And unlike other law firms, we do not just bonus people at the end of the year. When our firm makes money, everybody makes money, from the equity partners to the staff. This structure not only aligns our economic interests with our clients, but it creates a culture of teamwork across our entire firm. In fact, if you walk down our hallways on any given day, you will routinely hear our attorneys brainstorming and whiteboarding the most complicated issues in each other’s cases – which we think results in better work product for our clients.
LD: At this point, how would you describe the mix of cases that the firm is handling?
WTR: We have all plaintiff-side commercial cases. We have a national calling card for third-party claims arising out of insolvency. From that practice, we have developed a national reputation for high stakes, commercial legal malpractice claims. Virtually all of our cases are on some form of alternative fee. We prefer mixed-fee cases, with a blend of fixed payments and a contingent fee. Yet still, well over 50 percent of our practice remains purely contingent-fee cases.
LT: We bring cases that expose financial fraud and corporate malfeasance. At any given time, we have a large portfolio of cases arising from insolvency situations – for example, where we represent a bankruptcy trustee or offshore liquidator who has asked us to investigate and prosecute claims against third parties who caused the harm. These cases often involve fraud, breaches of fiduciary duty, and professional malpractice. As a result, we routinely prosecute claims against directors and officers, law firms, banks, and auditors.
Outside of the bankruptcy context, we similarly represent fund managers, investors, companies, and individuals who have suffered losses as a result of fraud or negligence. And in recent years, we have developed a practice representing whistleblowers in qui tam lawsuits.
LD: Bill, can you talk a bit about your Cayman Islands practice, how you developed it and about its success?
WTR: I handled a case called InverWorld, which was a $325-million Ponzi scheme. My primary job over a period of years was to oversee the accounting malpractice claims. The clients were a tandem of a U.S. Bankruptcy Trustee and a Cayman Liquidator. I even had joint hearings with the U.S. Bankruptcy Judge and the Cayman Judge and two sets of lawyers on the phone, which was pretty cool.
Over the years, I got to know the Cayman insolvency practitioners very well, and we have had a lot of success on their behalf. Our representation of offshore liquidators dovetails nicely with our work for bankruptcy trustees because so many of the underlying issues are the same. Of course, both onshore and offshore insolvency clients prefer alternative-fee lawyers because they have limited means to pay hourly-fee lawyers, and they usually need conflict-free counsel that can take on institutional defendants. That makes our law firm a natural solution.
LD: How do you sell the firm to potential clients used to hiring larger firms for their biggest cases?
WTR: Our marketing message today is much easier than in years past. This is so primarily because we have been so successful over the past seven years. Most notably, our $287.5 million judgment against Credit Suisse last year was a very large and very public win. It certainly caused people to take notice of this little Austin-based firm. It’s obvious, but once you get a $100M dollar case and you succeed, then you can get more. Once you get a billion-dollar case and you succeed, then you can get more.
So now, we market ourselves as the team that will handle your case, that works well together, is tenacious, resourceful, smart, and with successful trial experience and a track record of great results. Being a former AUSA never hurts in selling trial skills either.
LT: In many ways, our model sells itself. When clients call us, they nearly always have a problem that a big law firm cannot handle. We can bring claims against large banks, professionals, and corporations, but the big law firms are beholden to them. And we bring those claims on a mixed-fee or contingent-fee basis, unlike the large hourly defense shops. Frankly, hiring a large law firm to bring a plaintiff’s lawsuit is like cutting a steak with a butter knife – it does not work.
LD: Given the size of some of your opponents, how do you prevent your case and trial teams from being out-resourced during long litigations?
WTR: In short, our approach to cases is very front-end loaded. We almost always work up our cases and present a draft lawsuit to our opponent with the invitation to have an upfront business discussion. In fact, we usually tier our contingency fees so that we take a lower percentage on a pre-suit settlement and a higher percentage on a post-suit settlement. We get people to agree to the concept of “Let’s agree to some form of standstill agreement, and let’s give you everything we’ve got to say, and let’s hear everything you’ve got to say. If a settlement agreement at that point is appropriate, we’d love to have one. If not, tell us and then you will in effect choose to be sued.”
In most of our big cases, we enlist experts pre-suit and usually can take advantage of the pre-suit discovery available to a bankruptcy trustee or offshore liquidator in our insolvency practice. Long story short, we do a ton of upfront work and put our adversary to a decision where their unwillingness to negotiate or their low offers result in them – not us – choosing that suit be filed.
But, the answer to your question is that we get far ahead of our opponents before we ever engage with them and long before suit is filed and then we run our teams as efficiently as necessary but with the goal of getting the case trial ready as soon as possible. I think it helps that we are good at focusing on what is important and avoiding the time waste that many defense firms seem to engage in on things like written discovery and other largely useless tasks.
LT: We are used to taking on Goliath and winning. Our 28-lawyer firm daily goes toe-to-toe with the largest and most elite law firms in the country – as we just did in the Credit Suisse case. In our experience, being outmanned is not the same as being outgunned. While the big law firms may have more bodies, we have a cohesive team of talented lawyers who are personally invested in the outcome of our cases and focused on trying our cases. Our lawyers work as a team in every respect, we spend months preparing our cases before we ever file them, and we are typically miles ahead of our adversaries by the time we reach the starting line.
LD: The successful case against Credit Suisse Group drew a lot of attention. While you won liability before a jury, the large damages were decided by the judge. How did it happen that the case was split into a jury trial and then a bench trial, which benefitted your clients tremendously?
WTR: It is conventional wisdom that a jury is good for plaintiffs and a bench trial good for defendants. I would agree that generally a judge can be more difficult to try a case to on liability and can apply the various evidentiary standards more stringently, but once you establish liability to a judge, I feel he or she can more faithfully apply the law of damages without the split-the-baby type of decision that juries often make.
With that said, Credit Suisse chose to invoke a jury waiver in our case. But, New York law is clear that a claim for fraudulent inducement is immune from a jury waiver on the premise that it would be unfair to allow a defendant to invoke the benefits of an agreement if the plaintiff was induced by fraud to enter into the agreement. Thus, under New York law, fraudulent inducement is tried to a jury.
We knew going in that asking a judge to give us $300 million in damages was a tall order. But we thought – rightly – that if we could persuade a jury that Credit Suisse committed fraud by clear and convincing evidence that our breach of contract claims – which carried a preponderance of the evidence standard – would hopefully be well received by the court. And, we thought that if we got that far, the judge would give us all of the damages that we were entitled to on our non-jury claims.
Our plan played out as we imagined. We won the jury trial by an 11-1 verdict. In fact, the foreperson ironically was the only vote against us. Although we proved fraud by clear and convincing evidence, the jury only awarded us $40 million. Of course, our best liability and damage theories were only for the judge to decide. Although we did seek a much higher number in front of the jury, neither side had presented any evidence to support a $40 million award, and it was clearly the product of some backroom horse trading by the jury.
After the three-week jury trial, we came back six months later and tried the case to the bench. The judge awarded us liability on all three bases that we sought and then faithfully applied the law of damages and awarded us a $287.5 million judgment.
LD: How would each of you describe your own styles as trial lawyers? Do you see yourself as similar or different types of lawyers in the courtroom?
WTR: We are a great team. I bring over 20 years of trial experience and a big-picture view. Lisa is very detail oriented, and we complement each other well. But, what we have in common is that we both can be ourselves in front of a jury and that is a trait that all good trial lawyers have.
LT: Whether I am before a jury or a judge, I try to be authentic and tell them a simple story. My goal is to explain how my clients were harmed and why they are entitled to recover, and to show them why I personally have spent years fighting for my clients. No matter how complicated the facts, I believe every case comes down to what is fair, what is just, what is right, and what is wrong. These are universal human concepts that everyone understands, and that is what I try to focus on in every case.
LD: What are some of your formative experiences as trial lawyers?
WTR: My first law job was as a law clerk to Reynaldo G. Garza on the Fifth Circuit. What he impressed upon me more than anything else during my clerkship was that equities really do influence the result. In fact, it was my experience as a law clerk that taught me to focus on the equities and weave them into my themes.
I have a ton of trial stories, especially from doing 25 criminal trials in three years as an AUSA. We had one case before Judge William Wayne Justice, to whom I tried a number of cases, where a border patrol caught two dudes in the middle of the night with 450 pounds of drugs. None of the agents’ stories matched. I told my boss I couldn’t prosecute it, and he said “It’s been indicted. It’s your job to go prosecute it.” So we did.
The public defender in his opening statement said, “The moment they arrested my client, he told them they had the wrong guy.” And I asked to approach the bench. I’m a big approacher. And this was before a judge who was a personal hero of mine. And I objected by noting that you can seek to admit the hearsay of a party opponent, but you can’t put your own hearsay in and he’s talking about what his client’s going to say. The judge told me to sit down and overruled my objection.
A few days later, my agent witness is testifying, and the public defender began his cross examination with: “Isn’t it true my client told you the moment he was arrested ….,” and I say, “Judge ….” and ask to approach. But he told me to just state my objection where I stood. “And I say ‘are you sure, Judge’?”
So I’m speaking my objection, which I was told to do, and I set forth a valid and succinct objection to the admission of hearsay and then in the heat of battle said “If he wants to put his client on the stand, he’s free to do so.” At that moment, time stopped. The judge says, “Bailiff, dismiss the jury.” No one in the courtroom would look at me. My case agent wouldn’t even look at me. And I knew I was in bad trouble.
The judge says, “Reid, why did you find it necessary to invoke the client’s right not to testify in front of this courtroom?” And I said, “Judge, I asked to approach.” And he said that was true, and let me know in no uncertain terms that if I managed to win the case he would entertain a Rule 29 post-verdict motion to throw out the conviction.
I won a 27-minute guilty verdict, and the judge granted a new trial. We soon thereafter settled for a compromise plea bargain.
LT: Three weeks after I moved to Austin in 2004, I had my first hearing in federal court – and not just my first hearing, but my first opportunity to take a witness live on the stand in a Daubert hearing. I’ll never forget it. He was a banking expert and incredibly savvy. Bill had a lot of confidence in me and was going to give me – the baby lawyer, a three-year lawyer – the opportunity to take a witness live on the stand at this hearing. What I’ll never forget is he turned to me right before I go on, and says, “Don’t fuck it up.”
That’s become a running joke with us, and we still say it to each other. But I knew then the trust Bill put in me, and that represents how we run our firm and our cases. We give every lawyer on a case a meaningful role and trust them to do a great job.
LD: As your firm’s practice is national, why did you choose Austin as a home base?
WTR: Austin is a great place to live and work. Virtually everyone that visits agrees – the trick is to find a good legal job here. From the first time I set foot in Austin in 1992 working for Judge Garza I knew that I wanted to live here. In short, we can recruit amazing young lawyers even though we have virtually no local practice – so it works. Additionally, the overhead necessary to maintain our firm in Austin is a fraction of what it would be in places like New York.
LT: Even though I went to law school in Austin, I never planned to practice law here. I moved back to Austin after practicing law in Los Angeles for purely personal reasons – because my now-husband had started graduate school out here. Looking back, it was one of the best decisions I ever made in my life. Now years later, I get to live and raise kids in one of the best cities in the world while prosecuting complex and interesting cases alongside my good friends and partners.
LD: What do you look for in young trial lawyers?
WTR: We look for entrepreneurial, smart, self starters who are not fearful of independence and have the written and verbal skills we need. But everyone needs to satisfy the test of being someone we’d all want to spend our free time with. We are like a family, and we really focus on the team chemistry.
LT: When I recruit young lawyers, I am looking for a certain je ne sais quoi. As a baseline, we want candidates with exceptional academic records, but that is only a starting point. To do this line of work successfully and for the long haul, you need to possess a certain something that drives you to fight against all odds, that wakes you up at night when you have an epiphany about your case, and that gets you going each morning because you know you need to push the ball forward for your client. That certain something is intangible and hard to describe, but I definitely know it when I see it.
LD: Does each of you have an extra-curricular or public interest activity that you want to talk about?
WTR: My kids are in an International Baccalaureate school where they are taught in three languages and I serve on the school board. I am proud of the fact that our family travels abroad every summer for extended periods of time where we all practice our Spanish and learn about other cultures.
LT: I grew up in a family that was very active in community service, and I have followed in those footsteps my entire life. I sometimes joke that I have been president of every organization I have ever joined, although I think that may actually be true.
As a lawyer in particular, I have served for many years on the board of the Texas Fair Defense Project, which stands up for the constitutional rights of indigent criminal defendants. I think how we treat poor people accused of crimes is a direct reflection of the fairness of our entire criminal justice system. For those who are well off, we sometimes take our liberties and freedoms for granted, but I can tell you from experience that we have a lot of work to do to make sure our criminal justice system is fair for every one of us, rich or poor.
LD: If you had to do it all over again, would you still be a lawyer? And why?
WTR: No question. This is what I was meant to do. I love the mental chess game of the practice, but more importantly I like taking on large institutions and holding them accountable. The Credit Suisse case was very rewarding in that respect.
LT: I love what I do. I find it very motivating and rewarding to take on big business and expose financial fraud and wrongdoing. But I have to admit my original love was journalism, and I am sure I would be reporting on the nightly news in a parallel life. That said, I think it is no coincidence that my two professional passions are trial work and journalism because they really are about the same thing: finding out the truth and telling people about it.
LD: What do you hope we write about the firm in 10 years?
WTR: I hope you are writing about our next generation of amazing lawyers.
LT: I could not say it any better.