Boies Schiller Flexner's legal fees dispute with exiled Chinese businessman Guo Wengui has suddenly escalated, with Guo filing a $3.06 million malpractice suit, including punitive damages, against the firm and partner Josh Schiller.

Guo's suit, filed Dec. 31 in Manhattan Supreme Court, alleges Schiller, son of founder Jonathan Schiller, was unprofessional and repeatedly made derogatory comments in the course of the firm's representation. Guo's suit also alleges Boies Schiller mishandled information in Guo's asylum application and inappropriately applied his retainer to increase its interest costs.

In a joint interview Wednesday, Boies Schiller chairman David Boies and Josh Schiller forcefully rejected the allegations, asserting much of Guo's Dec. 31 complaint was already addressed and rejected by an arbitrator in an underlying arbitration over unpaid legal fees.