168th Commencement: Watch Live
Over the past four decades, James Benedict ’74 helped defend more than 50 cases involving excessive fees for managing mutual funds and other investment products. He also made it his business to hire Albany Law School graduates into his firm, the most recent being Milbank, Tweed, Hadley & McCloy, where he chaired the Litigation Department.
This year, he helped defend a $550 million case — the first of its kind to go to trial in seven years — with a team of four other Albany Law alumni. He put together a similar Albany Law team in 2009, except this latest case was different. It was his final case before retiring and handing his practice to Sean Murphy ’94, who led the recent trial, with assistance from James Cavoli ’92.
“This was a fitting final act for all of us,” said Benedict from his home in Vail, Colo., finally retired after attempting twice before. Benedict had hired Cavoli and Murphy in the early ‘90s, while at Rogers & Wells, before the firm merged with Clifford Chance.
Benedict, a Trustee of the law school, traveled to Albany pretty much every year to interview students. His final recruits were hired this summer: 3Ls Corey Carmello and Tess McLaughlin.
“Of the 30 litigation partners around the world at Milbank,” said Cavoli, “three of them are Albany Law graduates. That’s a testament to Jim, and an important part of his legacy. For the Albany Law grads drawn to working at a big firm in New York, Milbank is attractive because of the Albany contingency already here.”
“This is an Albany team that has won the only two cases of this kind to go to trial in the past 20-plus years,” said Murphy. With more than a dozen similar cases pending — several which Murphy will defend — the recent victory was watched widely by the industry.
The AXA Trial
At issue in the 25-day trial — a culmination of five years of litigation — were the plaintiffs accusing AXA Equitable Life Insurance Co. of charging excessive fees for “managing the managers” of the mutual fund. The plaintiffs argued that AXA delegated the work to sub-advisors and sub-administrators but retained most of the fees.
“This case set a lot of precedents,” Murphy said. “We learned a good deal from this trial, as did the entire industry. It’s the first of many pending on the issue of excessive management fees.”
Next up for Murphy and Cavoli: they will represent Hartford Investment Financial Services in a similar case involving a billion dollars, where they will face off against the same firm from the AXA trial, as well as some of the same expert witnesses.
The AXA case earned Murphy The American Lawyers’ Litigator of the Week recognition that served as icing on the cake for Benedict’s succession plan. “This seemed quite timely,” Benedict said. “We’ve been planning this transition for nearly 10 years.”
Third Time's the Charm
Of the eight trials involving excessive fee claims in the mutual fund world, Benedict has handled five of them, including the last three, significantly contributing to the case law that stands today. And while he has enjoyed success in most areas of his career, retiring proved to be a challenge.
“Sean and I had a lot of new cases coming up. I couldn’t just leave,” Benedict said. So he stayed on past the firm’s mandatory retirement age of 65. He tried again less than a year later, but then the AXA case was scheduled for trial.
“Sean served as first chair on the case, but I couldn’t leave the firm after all these years working on the case. I had to see it through,” he said.
Benedict is fully retired now, and enjoys his time fishing, skiing, relaxing, and spending time with his family.
“Sean no longer needs me around so I will try to stay away,” Benedict said. “But I can’t promise.”