Hotbeds of innovation, law firms usually are not. That’s not to suggest new ideas don’t flow from font of the legal profession but compared to say, Silicon Valley, it’s a bit of a slow mover. However, one American law firm recently ended up at the centre of a very innovative scheme which which erupted surprisingly enough out of its office admin department, from WSJ :

According to a federal indictment filed in San Jose late last week, prosecutors have alleged that a purchasing specialist out at Wilson [Sonsini] helped a San Francisco office supplier defraud the company of some $1 million through fake purchases of index tab dividers. That’s right. One million dollars worth of index tab dividers.

According to the indictment, John Masakazu Tashiro conspired with employees at a company called Attorneys Printing Supply from 2002 to 2006 to place dozens of purchase orders that were never filled. The APS employees allegedly billed Wilson Sonsini for the fictitious dividers and kicked some of the proceeds back to Tashiro.

Now we’re not that familiar with how much tab dividers cost in the US or how many you might expect to get for $1 million but we’d guess a lot. Lowering the Bar did some fag packet calculations:

The indictment listed examples of a purchase order in April 2003 for 49,475 tab dividers, and another in May 2006 for 81,500 tab dividers.

Assuming that these were the sort of tabs that come in sets of 25 … a highly conservative assumption – and that the indictment was actually intended to refer to individual "tab dividers" and not sets of them, then the 81,500 tab dividers ordered in May 2006 represented 16,300 sets for that month.  For comparison … our firm is roughly the same size as Wilson, and so assuming we have a similar rate of tab consumption, these guys ordered, but failed to deliver, up to eight times as many tabs as the Wilson firm needed per month.

Based on that, and the fact that a pack of 25 tabs costs about $5 at Office Depot … Wilson paid for five million tab dividers that it did not get.

Which begs the question of course, how come no-one in accounts noticed the tsunami sized surge in index-tab requirements?

Innovative. But for all the wrong reasons.

The Great Wilson Sonsini Office-Supply Swindle? [WSJ]
Big Firm Rocked by Tab-Divider Scam [LTB]