Schnader Harrison Segal & Lewis LLP has agreed to a $675,000 settlement to resolve a proposed class action alleging the firm misused retirement contributions from non-equity partners to support its operations during financial difficulties. The settlement motion was filed on August 12, 2025, in the U.S. District Court for the Eastern District of Pennsylvania.
The lawsuit was initiated by former income partner Jo Bennett, who claimed that the firm required non-equity partners and counsel to defer a portion of their annual compensation into the firm’s pension plan, despite the plan not mandating such contributions. These deferred funds were allegedly commingled with the firm’s operating accounts and used to finance the firm’s operations and distributions to equity partners, in violation of the Employee Retirement Income Security Act (ERISA). ([law.com](https://www.law.com/thelegalintelligencer/2024/02/08/schnader-harrison-faces-class-action-over-allegedly-misappropriated-attorney-compensation/?utm_source=openai))
In July 2024, U.S. District Judge John Milton Younge denied the firm’s motion to dismiss the case, stating that the plaintiff had “plausibly alleged interrelated violations” of ERISA. The judge emphasized that factual disputes, including the classification of the contributions and the extent of commingling, necessitated further discovery. ([americanlegaljournal.com](https://americanlegaljournal.com/defunct-law-firm-schnader-harrison-loses-bid-to-dismiss-erisa-suit-over-handling-of-retirement-money/?utm_source=openai))
Following the court’s decision, the parties engaged in settlement discussions. By November 2024, they had reached an agreement in principle, with plans to submit the settlement for court approval in February 2025. ([news.bloomberglaw.com](https://news.bloomberglaw.com/employee-benefits/dissolved-law-firm-inks-class-deal-over-attorney-retirement-plan?utm_source=openai))
The settlement, if approved, will provide financial relief to the affected non-equity partners and counsel. This case underscores the importance of adhering to ERISA regulations and the fiduciary responsibilities of law firms in managing employee retirement contributions.