I’m utterly astonished to read in a Wall Street Journal story this morning that the American Association for Justice, a trial lawyers group, is expecting the Treasury to issue an administrative order that will provide a tax break for attorneys pursuing contingency fee lawsuits.

Yes, you read that right. A tax break for the class-action lawsuit guys. It may be similar to legislation proposed last year that would have allowed attorneys to deduct fees and expenses up front in contingency cases, according to Legal Newsline, which broke the story.

The Journal splashes its piece with a headline guaranteed to outrage its readers and send shivers up corporate executives’ spines: “A Bill Lerach Tax Cut.”

Back in our December 2007 issue of Business Finance, Editor in Chief Jack Sweeney described class-action king Lerach as “the man CFOs most feared.” Note the past tense: Lerach was about to go down for 2 years after pleading guilty to conspiracy charges for concealing from judges kickback payments made to class-action plaintiffs by his old firm, Milberg Weiss. But the Lerach that Sweeney recalled from an interview years earlier was a man at the top of his game, roundly denouncing business leaders he viewed as having cheated investors and describing his own work as having “a prophylactic effect on corporate greed.”

Here’s an update: Ex-inmate Lerach has now completed his reintegration into society and seems to be doing fairly well for himself, “residing comfortably in one of the county’s most luxurious spreads, a cliffside villa in La Jolla,” according to the San Diego Reader, which adds that Lerach is “worth an estimated $700 million. The government made him pay a mere $7.5 million for his crimes.”

Disbarred now, Lerach won’t be in the class-action game again, but he has secured a good teaching gig at the UC-Irvine School of Law. And in his spare time, he’s still needling corporate America and battling for the little guy — for example, in a recent address to a left-leaning political group in which he railed against white-collar crime on Wall Street and the threat it poses to ordinary Americans’ pensions, according to The American Prospect.

But Lerach’s most enduring influence may be less to his liking. As media outlets and legislators alike are well aware, his name still holds power — and it’s the kiss of death to any proposals aimed at strengthening the hand of the plaintiff’s bar. ###