Skadden's offices in Washington, D.C. (Photo: Diego M. Radzinschi/ALM)

Skadden, Arps, Slate, Meagher & Flom's $11 million settlement with Yulia Tymoshenko marks the latest embarrassment for the firm related to its work in  Ukraine nearly a decade ago.

But for those who follow law firm liability issues, there's another feature that stands out. The case is also one more in a string of high-profile disputes pitting Skadden's defense lawyers at Gibson, Dunn & Crutcher against a regular adversary: Reid Collins of Reid Collins & Tsai.

Skadden paid at least $11 million to resolve claims by Tymoshenko, a former prime minister of Ukraine who was represented by Reid Collins, according to an exclusive New York Times report this week. The Times' report indicated that no lawsuit was ever filed against Skadden; instead, the payments were revealed through filings made in Ukraine.

William Reid IV, a founding member of Austin, Texas-based Reid Collins, declined to discuss the Tymoshenko matter other than to confirm the representation. He said that a hallmark of his practice is to resolve legal malpractice disputes before they hit a court docket.

"Sometimes a case is more valuable by the threat of the one bullet being fired than actually killing the patient with the one bullet," Reid said.

William Reid IV of Reid Collins & Tsai.

Reid said his practice of suing—or threatening—law firms was born out of his bankruptcy work, representing parties with some kind of claim against a firm. And he said it's a specialty that remains relatively rare even 20 years later.

"Today, there is this notion that suing a lawyer or a law firm is beneath most lawyers," he said.

He said most of his clients are targeting law firms that have allegedly botched some kind of transaction. In Tymoshenko's case, the former prime minister took aim at Skadden's purportedly independent analysis of her prosecution by former President Viktor Yanukovych, her political rival. Skadden's 2012 report determined that while Tymoshenko was denied access to counsel, her conviction of abusing her official powers was supported by the evidence.

"Based on our review of the record, we do not believe that Tymoshenko has provided specific evidence of political motivation that would be sufficient to overturn her conviction under American standards," Skadden wrote in its report.

As the U.S. government—through special counsel Robert Mueller—began scrutinizing  Skadden's work in Ukraine, the firm turned to Gibson Dunn, including the leader of its highly in-demand law firm defense practice group, Kevin Rosen.

Early last year Skadden settled the DOJ's claims of failing to comply with the Foreign Agents Registration Act for $4.6 million. Former Skadden partner and Obama White House counsel Gregory Craig was charged with concealing his involvement in the firm's Ukraine work from the Justice Department, but he was acquitted by a federal jury in September. Zuckerman Spaeder represented Craig.

Gibson Dunn reprised its role representing Skadden when Tymoshenko and Reid pressed their civil claims. And this week Reid praised Rosen as a great lawyer who is at the top of his practice, calling him a "tough out"—hard to beat.

The Skadden-Ukraine fight is far from the first legal battle to pit Gibson Dunn against Reid Collins, and it probably won't be the last. Reid Collins represented the liquidators of a former Harvard University quarterback's hedge funds in a lawsuit against a DLA Piper lawyer who allegedly helped an investment manager misappropriate funds; Gibson Dunn, representing DLA Piper, convinced a U.S. bankruptcy judge in Manhattan to dismiss the lawsuit in September 2015.

Reid Collins and Gibson Dunn also found themselves on opposite sides of a $500 million battle between a pair of liquidators overseeing defunct Bear Stearns investments and Reed Smith. The plaintiffs and Reed Smith reached a settlement in October.

Reid estimated that somewhere between two-thirds to 80% of the legal malpractice cases he works on resolved before a lawsuit is ever filed. Reid said he views these disputes as business problems that can be settled before a court gets involved, which can complicate that resolution.

"Once litigation is filed, it tends to take on a life of its own," he said.

Rosen could not be reached for comment. Gibson Dunn and Skadden did not respond to requests for comment.

Read More

Greg Craig Found Not Guilty of Deceiving DOJ About Ukraine Work

At Greg Craig's Trial, Skadden Arps Is Watching—And Testifying

Read: Skadden Registers Ukraine Advocacy After Settling DOJ's Lobbying Case