John Pierce. Photo by Jack Newsham/ALM.

Pierce Bainbridge Beck Price & Hecht founder John Pierce is on a leave of absence from the firm as an internal investigation showed he accepted money from a lender for personal use, according to a statement from a law firm spokeswoman Monday.

"A preliminary investigation has revealed that John M. Pierce accepted money from Karish Kapital LLC for his personal use. Mr. Pierce is on an indefinite leave of absence from the firm," said Holly Baird, who identified herself as a spokeswoman representing the firm.

Baird later sought to eliminate the "indefinite" description from the statement but provided no details on the length of the leave. She said partner Tom Warren has taken over as acting managing partner "as the firm continues its investigation."

Pierce, when reached on Monday evening, said he was dealing with "family, medical" issues and strongly denied the statement, saying it was false.

Warren did not directly respond to questions about Pierce's comments on the statement. However, in another email, Baird told Law.com, "We know this has been a difficult time for John, and we wish him well."

The statement came hours after Law.com asked the firm about public records filed on Feb. 25 that show Karish Kapital LLC filed a lien on the assets of the Pierce Bainbridge firm, Pierce individually, and John M Pierce Enterprises LLC. The lender lists a residential address in Flushing, Queens.

Law firms, particularly plaintiffs firms, are known to turn to specialized sources of finance. But KarishCapital.com, which links to social media pages for "Karish Kapital," portrays the entity as a merchant cash advance company, essentially a payday lender for small businesses.

The Karish Kapital lien lists all the debtors' assets as collateral and alludes to an agreement that prohibits "debtor" from any "further encumbering" of the collateral.

Yair Matan, who is listed on a phone directory at Karish Kapital's address, hung up twice on a reporter Friday, promising to call back. He didn't.

Pierce Bainbridge has been open about its use of litigation funding to grow rapidly. Former partner Donald Lewis has accused the firm of misleading Pravati Capital, one of its earlier backers, about the prospect of recovery in several major cases, but the firm and Pravati have said their relationship ended amicably.

Two sources told Law.com that Warren, a partner in Pierce Bainbridge's Los Angeles office who joined the firm from Baker & Hostetler, had taken over as firm leader in recent days. Pierce's profile no longer appears on the firm's website. Jim Bainbridge is listed on the firm's website as co-managing partner.

The turmoil at the top comes amid more departures in the firm's partnership. Not long after the lien was filed Feb. 25, between March 1 and March 4, four partners disappeared from Pierce Bainbridge's website.

In New York, they are Caroline Polisi, a white-collar defense lawyer known for her frequent television appearances, and Yavar Bathaee, a former Sullivan & Cromwell lawyer with a focus on legal technology. In Boston, they are Tom Frongillo, an ex-prosecutor who once led Weil, Gotshal & Manges' litigation team in the city, and Ted Folkman, who joined from Murphy & King.

Pierce Bainbridge has grabbed headlines in recent years for its rapid growth and its clients. The firm has represented clients such as Rudy Giuliani, Tulsi Gabbard and Michael Avenatti.

Pierce has also made headlines for his bravado. He once said his firm will overtake Quinn Emanuel Urquhart & Sullivan as a top plaintiffs firm within "five to seven years." Still, the latest departures come after Law.com noted six other partners left from August to October of last year. Earlier this year, two white-collar defense partners who were representing Giuliani on Ukraine-related investigations left for Armstrong Teasdale.