I don’t cite these facts to dispute that prosecutors proved I committed a crime. But I do suggest that the story is a lot muddier than many think. Some believe the legal system is a shiny, sharp-edged machine that computes the indisputable truth from the facts with airtight legal logic. In reality, as anyone who has experienced the legal system up close knows, the law is full of soft edges and subjective decisions. Some matters are black-and-white, but there is also no shortage of gray.

Let me clear up some misconceptions about my case. The government contended that the people on whose behalf we sued were damaged by the fees paid to plaintiffs. This is false. Milberg Weiss was an aggressive firm and achieved superior results. The legal fees in our cases were earned based on the work done and the results achieved. If some of the lawyers’ fees were shared with plaintiffs, that didn’t diminish the amount of money they could win; it simply reduced our fee. No payments that were made should distract from the fact that justice prevailed in these cases and the rights of victimized shareholders were upheld.

Other misunderstandings relate to the role that fee sharing played in securities class-action suits before 1995. Most of the pre-1995 plaintiffs in securities cases were individuals who suffered small losses. If their cases had merit, courts let them go forward. If they were flawed, courts threw them out. Groups of people for class-action suits were routinely certified by courts with the knowledge that these plaintiffs were figureheads, giving lawyers the go-ahead to represent a class of defrauded investors. The courts scrutinized the legal fees and then awarded them after giving class members an opportunity to object.

Prior to the 1995 act, Milberg Weiss did not voluntarily pay plaintiffs a share of its fees out of the goodness of its heart; we did it to stay competitive. Paying plaintiffs was an industry practice. Neither class members nor competitive law firms were disadvantaged or harmed by it.

A more fundamental point is this: The world’s wealthiest and most powerful corporations approach securities cases as a war of attrition. The companies do everything in their power to persecute and inconvenience overmatched individual plaintiffs in hopes that they will conclude that it isn’t worth the trouble and drop their cases. Lengthy interrogations; brutal depositions; meticulous searches through plaintiffs’ private financial information, tax returns, and unrelated investments; even the use of private investigators—these are all the norm.

Our experience told us that whistleblower plaintiffs require incentives to come forward to act on behalf of a large number of victims. If these plaintiffs weren’t willing to stick their necks out, there would be no class-action suits, no recovery, and victims would get no justice at all.

In suits filed against contractors accused of defrauding the federal government, the whistleblower who spots the fraud or brings the suit gets a cut of the recovery, which is sometimes worth millions of dollars. It’s a remarkable double standard: The feds split the take from successful government-contract-fraud suits with plaintiffs but imprison lawyers who share their fees with ­someone who helps bring a successful securities-fraud suit that benefits thousands of investors. Go figure. 

Let me offer an example: Brown v. Board of Education, the landmark case that outlawed racial discrimination in public schools, was a class-action suit. Let’s assume—and of course, there is no evidence that this happened—that the lawyers compensated the plaintiffs for the considerable inconvenience and hassle they endured for years after bringing the case. I suspect you would find such ethical impropriety tolerable and certainly not criminal. But under our current system, it wouldn’t be legal.

Given my jail sentence, what is the future of class-action suits? What will happen to stockholders who have been victimized by corporations? What kind of system do we want?

Perhaps what could come out of my case is a rethinking of the class-action system. The rules against splitting legal fees with nonlawyers are meant to prevent lawyers from paying what are known as cappers or runners to attract injured plaintiffs for filing personal-injury suits. Some undereducated workers or accident victims who did not understand their rights to sue and did not have access to lawyers would not have brought lawsuits were it not for these runners. Lawyers retained by big companies worked hand in hand with the powerful interests they represented to create a system of restrictions and prohibitions designed to protect themselves. The origin of the rule against splitting legal fees with nonlawyers had nothing to do with stopping frivolous litigation. In my view, it had to do with preventing litigation, period.

The motivation was similar for the now discredited rules prohibiting attorneys from advertising. The same interests that fought class-action suits erected these barriers to free communication. If ordinary people don’t know about their legal right to pursue dishonest stockbrokers, insurance and drug companies, and makers of dangerous products, then those groups will face far fewer suits, meritorious or not.