THE MAN CHASING ENRON.

On the morning of January 22nd, a lawyer named Bill Lerach got out of his van in front of the Houston federal courthouse and presented a cardboard box full of shredded documents to the cameras of a waiting press corps. At the time, the implosion of Enron was still leading the news, and Lerach had filed a lawsuit against the company on behalf of its aggrieved shareholders. "It's a smoking howitzer," Lerach told reporters that day. "It doesn't get any worse than this. Call the cops. Something has to be done here." The pictures of Lerach and the documents, which Enron employees purportedly had shredded, became an indelible image of the collapse of the energy-trading firm. "I thought I was going to be run over by the media," Lerach recalled months later. "Never underestimate the power of a physical exhibit."

Lerach, who has spent the last few decades suing corporate executives for lying to, cheating, and otherwise defrauding their shareholders, is probably the leading class-action lawyer in the country. He regards the Enron lawsuit as the most important case of his career. "This case sums up everything I've been saying about these companies for years," he told me happily. "I was right for ten years, and no one cared. In case after case, we pleaded that the analysts for the investment banks were corrupted. We pleaded that the accountants were corrupted by their consulting fees. These judges were incredulous. They threw us out. They said professionals would never behave that way. Well, we saw how they behaved, didn't we?"

For the past year or so, Lerach has shadowed the procession of corporate disasters. On August 20th, for example, his firm sued Martha Stewart, alleging that she dumped stock in her own company when she learned that she was going to be investigated for insider trading in shares of the biotech firm ImClone. To be sure, Lerach has lost a few of these cases, but even some of the defeats make him look farsighted. In November of 2000, he sued WorldCom; a federal judge in Mississippi dismissed the case last March--shortly before the company collapsed in an accounting scandal. In December of 1999, Lerach sued Tyco International, and a judge in New Hampshire turned him away last February--not long before that conglomerate had its own accounting scandal. But Lerach's goal is less about muckraking and more about the money to be made in his line of work. Even his public unveiling of the shredded documents in Houston revealed his multiple agendas. Lerach wanted to use the documents against Enron, but he also wanted to persuade the judge to designate his law firm's client the lead plaintiff in the case, and in that way earn tens of millions of dollars in legal fees.

Lerach has been reviled by his targets, many of which are highly reputable firms like Intel and Apple, which view him as little better than a skilled extortionist, using the legal system to harass them. But Lerach has lately become a hero of the political left; a recent story in The Nation suggested that he was "America's top corporate crime fighter." On the basis of the last decade or so, Lerach may have as great an influence on the regulation of public companies as Congress and the President, who, in a rare moment of bipartisanship, passed and signed the Sarbanes-Oxley bill; the new law would lengthen prison sentences for white-collar criminals, require C.E.O.s to vouch for their companies' reports, and tighten the supervision of accountants. Lerach's case against Enron illustrates, for better or worse, the result of relying on private lawyers to do the public's business of policing corporate America.

At fifty-six years old, Lerach has a soft,fleshy look--"Scotch is my exercise," he explained--but what everyone notices is his hair, a mop of frizzy blond curls that resembles a full Afro when he neglects it, which is often. He grew up in Pittsburgh and started his law practice there, but after divorcing the woman he calls "my very, very first wife" he moved to San Diego. Lerach has been married and divorced three times and currently shares a large home near a country club with Michelle Ciccarelli, a thirty-four-year-old associate at his law firm, Milberg Weiss Bershad Hynes & Lerach. "I was blackballed by the country club," Lerach told me with pride. "I had sued two of the guys on the board of directors."

While he was in Pittsburgh, Lerach met a young New York lawyer, Melvyn I. Weiss, who was in the process of transforming securities law, which defines the rights of shareholders. In 1966, the Supreme Court, exercising its authority over the workings of federal courts, revised the rule on class actions, in ...