March 2010

Google’s Top Lawyer Makes More than $2M in Bonus and Pay

By Debra Cassens Weiss, ABA Journal

03-08-10 -- Google’s chief legal officer is getting a $1.73 million discretionary bonus this year, on top of a base salary of $500,000. . . . The compensation is outlined in a filing with the Securities and Exchange Commission, according to PaidContent.org and the San Jose Mercury News. . . .Proxy materials released last year showed Drummond earned a $450,000 salary in 2008 and made a $1.38 million bonus. He also had $3.29 million in stock and option awards, according to the proxy materials.

NEW JERSEY  

Shareholders Cry Conflict of Counsel in Class Action
Over Merck Merger

Charles Toutant, New Jersey Law Journal

03-08-10 -- A law firm faces conflict allegations over its projected $3.5 million fee for representing shareholders who obtained no monetary or equitable relief in a class action settlement over the merger of drug giants Merck and Schering-Plough. . . . Class member Allan Marain, a lawyer in New Brunswick, N.J., filed papers Wednesday opposing the settlement, which a federal judge has tentatively approved, and seeking sanctions against the firm, Carella, Byrne, Cecchi, Olstein, Brody & Agnello in Roseland, N.J. . . . The parties settled the claims in In re Schering-Plough/Merck Merger Litigation, 2:09-cv-1099, last July, and Carella Byrne and Merck reached the agreement for the $3.5 million fee in talks with a court-appointed mediator last November. A final approval hearing is set for March 24. . . . Metuchen, N.J., solo Mark Silber, who represents Marain, argues that certifying the class serves no purpose except to make Carella Byrne eligible for attorney fees. Because the class members are now holders of Merck stock, they would benefit more if the class were not certified, because then Carella Byrne would not be eligible to apply for fees, says Silber. . . . "They didn't accomplish anything at all. They go from representing a class to achieving nothing and wanting their clients to pay them three-and-a-half million dollars. They switched their allegiance," says Silber.

CALIFORNIA  

High cost of McCourts' divorce: $19 million in fees

Dodgers' case could be one of the most expensive in California history. Even other high-profile divorce attorneys are surprised.

By Bill Shaikin, Los Angeles Times 

03-05-10 -- Frank and Jamie McCourt's divorce could become one of the costliest splits in California history, with attorneys and accountants commanding as much as $19 million in fees — more than the Dodgers will spend on their starting infield this season. . . . Frank McCourt has estimated his "divorce-related expenses" at $5 million to $10 million, according to court filings. Jamie McCourt has estimated her expenses at $9 million — and asked that her estranged husband be ordered to pay them. . . . Although records of salaries and statistics are omnipresent in baseball, specific information about divorce costs is largely unavailable. The Times consulted with several family law experts, none of whom could recall a divorce costing $19 million. . . . "I'm pretty sure there's not been any litigation in a California divorce where they've spent so much on attorneys' fees," said Lynn Soodik, a Santa Monica family law attorney who represented Meg Ryan in her divorce from Dennis Quaid.

Big Bankruptcies' Big Fees Raising Questions

Brian Baxter, The American Lawyer

03-05-10 -- The Chapter 11 cases of copper miner Asarco and casino operator Station Casinos have been a gold mine for bankruptcy lawyers. Baker Botts broke the $100 million billable mark in the five-year-old Asarco case last August, and the legal bills in the seven-month-old Station Casinos case are approaching $20 million for a dozen law firms. But future fees might not be paid out so easily as the bills have come under increasing scrutiny. . . . We've taken a close look at fee filings in both cases. Hourly billing rates for attorneys, when available, are listed in parentheses. . . . Station Casinos / When we first reported on the Chapter 11 filing of Station Casinos last summer, it struck us as one of the more twisted and complex bankruptcy cases around. And not for nothing. Since Station filed for bankruptcy on July 28, nearly a dozen law firms have landed some piece of the work for the struggling Las Vegas-based casino operator. Station has paid out nearly $20 million in legal bills in less than eight months.

NEW YORK  

Judge Praises Lawyer in Lawsuit Over Staten Island Ferry Crash but Retains Cut Fee

Mark Fass, New York Law Journal

03-05-10 -- Manhattan personal injury attorney Evan Torgan should not face disciplinary action for the circumstances under which he signed a paralyzed victim of the 2003 Staten Island Ferry disaster to a retainer agreement, a U.S. magistrate judge in Brooklyn has recommended. . . . There "is no evidence whatsoever that Torgan acted improperly or sought to take advantage of the claimant in any way in the discussions leading to the signing of the retainer agreement," Eastern District of New York Magistrate Judge Viktor V. Pohorelsky wrote in a report and recommendation issued Thursday in McMillan v. City of New York, 08-cv-2887. . . . "Indeed, the evidence all points to the conclusion that Torgan acted entirely professionally and honorably in commencing his representation of the claimant. There is accordingly no basis for considering any disciplinary action whatsoever." . . . However, the magistrate judge also recommended that Eastern District Judge Jack B. Weinstein reject Torgan's motion to reverse Weinstein's decision to reduce Torgan's fee to 20 percent from 33 percent of the $18.3 million verdict -- a reduction from about $6 million to just over $3.6 million.

CALIFORNIA  

Court Tosses $5 Million Fee Award, Saying Trustee Overpaid for 'Rolls Royce' Defense

Leigh Jones, The National Law Journal

03-04-10 -- A California appeals court has snatched away $5 million in fees from attorneys at three top firms in a dispute over the riches of a deceased shopping mall magnate. . . . The state's 4th District Court of Appeal ruled that the trial court erroneously "rubber stamped" requests for attorney fees by Loeb & Loeb, Jones Day and Greenberg Traurig. The law firms represented the former trustee of Daniel W. Donahue's estate. Donahue, who died in 2002, was chairman of Donahue Schriber Realty Group Inc., a Costa Mesa, Calif., real estate firm that owned numerous shopping centers in California and other western states. . . . Reversing the fee award on Feb. 24, the three-judge panel said that the firms' client, Patrick Donahue, had embarked on a "spare no expense strategy" by hiring the three firms at once. The panel, in remanding the case, ruled that although the client's strategy may have benefited him, it was questionable whether it benefited the Donahue trust.

NEW JERSEY  

Superfund Case Tests if Law Firm Can Seal Affidavit Supporting Fee Application

Mary Pat Gallagher, New Jersey Law Journal

03-03-10 -- A multimillion-dollar fee fight in a Superfund case is testing whether a firm can file a secret affidavit supporting its fee application, so as to keep its special billing practices from the eyes of competitors in the environmental bar. . . . Eight months after a federal judge in Newark, N.J., ordered fees shifted in U.S. v. NCH Corp., 98-5268, and gave the parties a deadline to decide on a reasonable amount, they are back in court -- disputing not only the $3 million demanded but whether the fee affidavit can be sealed. . . . On Feb. 11, Sun Pipe Line Co., the party seeking fees, filed a paper copy of the affidavit with U.S. District Judge Susan Wigenton in Newark and e-filed a motion asking her to seal it. . . . The stated ground was that the affidavit and accompanying exhibits "contain highly confidential, competitive business information regarding the special billing practices of Sun's counsel, Beveridge & Diamond, ... the disclosure of which would cause clearly defined and serious injury to Beveridge & Diamond." . . . The information sought to be protected concerns hourly rates, fee arrangements, and competitive billing and pricing information from Sun's experts.

February 2010

FEDERAL COURTS

7th Circuit Worries -- but Not Too Much -- About Insurer Influence in Attorney Fees Case

Lynne Marek, The National Law Journal

02-25-10 -- The 7th U.S. Circuit Court of Appeals reversed two lower court decisions on the awarding of attorney fees in a decision last week consolidating three cases in which private parties sought fees after they prevailed over the U.S. government. . . . The appeals court also took a stand for the first time on whether an insurance company's paying for litigation should make a difference in the awarding of fees. . . . The three cases were brought under the Equal Access to Justice Act, which allows the granting of fees to parties of limited means "unless the court finds that the position of the United States was substantially justified," said the unanimous Feb. 18 decision written by Judge Richard Posner in U.S. v. Thouvenot, Wade & Moerchen.

DISTRICT OF COLUMBIA  

What the New White House Counsel Made Last Year

David Ingram, The National Law Journal

02-22-10 -- White House counsel Robert Bauer made just under $1 million last year as the head of the political law group at Perkins Coie, according to a financial disclosure form he filed this month. . . . Bauer reported $958,788 in salary and bonuses from the firm, where he was a partner in its Washington office. That's almost 20 percent above the firm's 2009 profits per equity partner of $802,111, as reported this month by The AmLaw Daily. He also reported $14,000 in speaking honoraria and a $7,500 fee from teaching at Yale University last spring.

MISSISSIPPI  

Miss. judge upholds $14M lawyers' fees in MCI case

The Associated Press, BusinessWeek       

02-19-10 -- Mississippi judge has upheld $14 million in fees paid to two former attorneys for handling a state lawsuit against telecommunications giant MCI. . . . Hinds County Circuit Judge Winston Kidd dismissed the challenge filed by State Auditor Stacy Pickering. . . . Pickering said Friday that he is considering an appeal to the Mississippi Supreme Court. . . . "From the very beginning of this case, we had expected the Mississippi Supreme Court would have the final say no matter who won at the circuit court level in Hinds County," he said. . . . It's our belief that the lower court didn't address the issues we raised in the dispute. Contingency fees should be paid for by money appropriated by the Legislature."

Judge agrees to funds distribution

Associated Press, WXVT 

02-19-10 -- A federal judge has signed off on a split of $425,000 seized as part of the judicial corruption investigation in Mississippi. . . . The money was taken from former Hinds County District Attorney Ed Peters. Peters allegedly was paid $1 million on behalf of former Mississippi attorney Richard "Dickie" Scruggs to influence Hinds County Circuit Judge Bobby DeLaughter in a civil case. . . . U.S. District Judge David Hittner, in an order signed Wednesday, approved a settlement between the government and attorney William Roberts Wilson Jr. Wilson will get $280,000. The government will keep the rest.

TEXAS  

FDR, Batman Cars Pay Houston Lawyer’s Debt to Implant Victims

By Laurel Brubaker Calkins, Bloomberg 

02-19-10 -- Some of the world’s most expensive cars will be auctioned in Florida next month, the legacy of a Houston attorney who amassed 870 museum-quality vehicles before being killed in an automobile accident in October. . . . John O’Quinn owned classic Rolls-Royces, a limousine for presidents, and the world’s biggest collection of Duesenbergs, said Gerald Treece, executor of his estate. The O’Quinn Law Firm represented clients injured by tobacco, breast implants and diet drugs, earning fees that Forbes magazine estimated at $1.5 billion. . . . The estate is selling some of the autos to provide liquidity to settle debts, Treece said. One of the biggest is a $46.5 million arbitration settlement owed to more than 3,000 clients who accused O’Quinn of overcharging for expenses in winning their breast-implant cases. . . . “I’ve already had somebody call me offering $150 million to take the whole collection,” Treece said. “But the experts told me the worst thing I could do was sell the cars as a whole or flood the market with them all at once.”

NEW YORK  

Work in Similar Cases Justifies Cut in Fee Request, 2nd Circuit Finds

Vesselin Mitev, New York Law Journal

02-18-10 -- Attorneys who settled a class action lawsuit over impermissible strip-searching of county jail inmates were properly awarded a smaller counsel fee than they sought due to their prior experience in filing similar cases, a federal appeals court has ruled. . . . In a decision issued Tuesday, a three-judge panel of the 2nd U.S. Circuit Court of Appeals held that Northern District Judge Gary L. Sharpe properly considered the settling of two earlier strip-search cases by plaintiffs counsel to discount their fee in a third case. . . . "The district court's decision to consider the benefit afforded to counsel by this experience ... does not constitute an error of law," Judge Debra A. Livingston wrote for the circuit in McDaniel v. County of Schenectady, 07-5580-cv. Judge John M. Walker Jr. and Southern District Judge Lewis A. Kaplan, sitting by designation, joined the ruling.

TEXAS  

Inside Lyondell Bankruptcy's Texas-Sized Legal Bills

Brian Baxter, The American Lawyer

02-18-10 -- Houston-based Lyondell Chemical is hoping that its yearlong Chapter 11 case is nearly over after reaching a $450 million settlement with creditors early this week. The Am Law Daily did some docket-digging this afternoon to see how much firms have profited from the pharmaceutical giant's bankruptcy court odyssey.

It turns out Lyondell has paid more than $58 million in fees and expenses to six firms through Aug. 31 of last year.

Click for  a quick breakdown of the biggest breadwinners

CALIFORNIA  

BigLaw Firm Violated Ethics Laws, Won't Get Fees in BAR/BRI

By Amanda Royal | The Recorder | New York Lawyer

02-17-10 -- BAR/BRI may be paying $49 million to law students who overpaid for test materials, but it won’t be paying the lawyers at Los Angeles-based McGuireWoods who secured the class action settlement. . . . McGuireWoods lost its latest round of appeals when U.S. District Judge Manuel Real ruled earlier this month that the firm violated ethics laws and denied its $12 million in attorneys fees. McGuire Woods had offered incentive payments to some, but not all, of the named plaintiffs in the class action against BAR/BRI, Ryan Rodriguez v. West Publishing Corp., No. 05cv3222 (C.D. Calif.).

NEW JERSEY  

Merck Pays $12 Million in Lawyer Fees to End Vioxx Suits

Charles Toutant, New Jersey Law Journal

02-16-10 -- Merck & Co. has agreed to pay $12.15 million in plaintiffs' legal fees to settle two shareholder derivative suits over its painkiller Vioxx -- one in state court in New Jersey and the other in the 3rd U.S. Circuit Court of Appeals. . . . The suits charged the Whitehouse Station, N.J., manufacturer's current and former directors and officers with breaches of their fiduciary duty in connection with the promotion of Vioxx despite evidence that it caused heart problems. . . . As part of the settlement, Merck agreed to create two committees to address product safety. One would identify and address risks that could impact customers and require immediate action. The other would draft and implement procedures to monitor the safety of drugs marketed or studied by the company and would establish and publicize internally procedures by which employees can raise concerns about drug safety.

January 2010

MASSACHUSETTS   

Mass. Judge Orders Two Lawyers to Refund $329K in Excess Fees to Client's Estate

Sheri Qualters, The National Law Journal

01-04-10 -- A Massachusetts probate judge recently ordered prominent Boston family lawyer Gerald Nissenbaum and another attorney to refund a client's estate nearly $329,000 in excess legal fees. . . . Plymouth County Probate and Family Court Judge Stephen Steinberg's Jan. 14 order gave the attorneys 30 days to make the payments. . . . The Barnstable County probate case, In re Guardianship of Kenneth E. Simon, ended up on Steinberg's docket after the Massachusetts Appeals Court recused Judge Robert Scandurra of the Barnstable Probate and Family Court in December 2007. The decision does not address the basis for that recusal. . . . According to Steinberg's order, Simon's guardian, E. James Veara of Dennis, Mass.-based Zisson & Veara, and Nissenbaum sought about $500,000 in attorney and guardian fees for an 83-day guardianship of Simon, which ended with Simon's death on Nov. 2, 2005.

FEDERAL COURTS

A Small Law Firm ... But an Oh-So-Big Payout in United Airlines Case

Lynne Marek, The National Law Journal 

01-28-10 -- The $44 million payday coming for some United Airlines pilots next week from the settlement of a pension dispute will include a $16.4 million payout for their Illinois lawyers. . . . Myron M. Cherry & Associates of Chicago will get the lion's share of the Feb. 3 payment, raking in $9.8 million as class counsel in the long-shot labor dispute. Korein Tillery, a St. Louis-based firm, will take home $6.6 million for chipping in over three years. They represented 2,200 senior United pilots who claimed in a December 2006 federal lawsuit filed in Chicago that they were shortchanged by their union in a distribution of pension benefits related to the airline's bankruptcy. . . . "We thought that was a wrong that was so clear that we could squeeze it into some legal theory," said Myron "Mike" Cherry, who said the award is among the top three biggest ever for his firm. . . . The two small firms triumphed over big-law rivals. Once the pilot plaintiffs defeated a motion for summary judgment last July by the union Air Line Pilots Association International, which was represented by Mayer Brown, and won denial of a motion for reconsideration in September, the case preliminarily settled in October and reached final settlement last month. The settlement was announced last week after a period for appeals had lapsed.

MASSACHUSETTS   

Court Blasts K&L Gates Team's Huge Fee and 'Unnecessary Lawyering'

Posted by Robert J. Ambrogi, Law.com Legal Blog Watch

01-28-10 -- Is it excessive for lawyers to collect more than $800,000 in fees and costs from an estate valued at $1.2 million? Noting that would add up to 67 percent of the estate's total value, the Massachusetts Supreme Judicial Court made no bones about its opinion on the fee request, saying that it represented "unnecessary lawyering." . . . That does not mean that the lawyers from K&L Gates in Boston who made the request will go penniless. In an opinion issued yesterday, In the Matter of the Estate of Bartley J. King, the SJC sent the case back to the trial judge to decide a "fair and reasonable" fee award. But the court did not let go of the matter without first letting the litigants know its distaste for the fees requested.

NEW JERSEY  

Lawyer Seeks to Hold Client to Alleged Vow to Pay Fees Even If Bankrupt

Mary Pat Gallagher, New Jersey Law Journal

01-28-10 -- Legal fees, like other debts, are usually wiped clean in a Chapter 7 bankruptcy, but Jason DiBattista's $35,000 debt to his divorce lawyer, Gregg Sodini, was not typical. . . . For one thing, DiBattista is himself a lawyer, concentrating in bankruptcy, and was once Sodini's colleague at Cuyler Burk in Parsippany, N.J. . . .For another, Sodini contends he handled the divorce based on DiBattista's promise to pay the fees even if his precarious finances landed him in bankruptcy. . . . Whether DiBattista made the promise is unclear; he has neither admitted nor denied it. But what is certain is that when he filed for bankruptcy last July, he listed the fees as an unsecured, nonpriority claim, and they were discharged along with his other debts on Aug. 21. . . . Sodini tried to block the discharge, filing an adversary action on July 24, but U.S. Bankruptcy Judge Donald Steckroth granted DiBattista's motion to dismiss on Oct. 13. Sodini is appealing that decision to the district court.

Federal Judge Calls 2nd Circuit's Approach to Calculation of Attorney Fees 'Condescending'

Mark Fass, New York Law Journal

01-27-10 -- A federal judge in Brooklyn has launched another volley in the ongoing dispute between the judges of the Eastern District of New York and the 2nd U.S. Circuit Court of Appeals regarding the standards for calculating awards of attorney fees. . . . Faced with a remand of an award ordering him to "apply a presumption in favor of" the prevailing fee rate for attorneys in the Eastern District, Judge Frederic Block has affirmed in Luca v. County of Nassau (pdf), 04-CV-4898 (FB), his earlier award of $400 per hour for Hempstead litigator Frederick K. Brewington. . . . In a critical and cutting 16-page decision, Block wrote that "numerous recent cases in the Eastern District convince the Court that a reasonable paying client would gladly pay $400 per hour for an attorney of Brewington's caliber." . . . The decision, as well as the dispute between the Eastern District and the 2nd Circuit, center on last August's circuit decision in Simmons v. New York City Transit Authority (pdf), 575 F.3d 170, which held that "when faced with a request for an award of higher out-of-district rates, a district court must first apply a presumption in favor of" the district's own prevailing rates.

FLORIDA  

A Cap On Lawyer Fees Roils Florida Politics

Peter C. Beller, Forbes

01-27-10 -- Awash in lawyer money, Florida agrees to compensation limits for class action lawyers. . . . In what could be a big victory for advocates of public pension reform, Florida officials on Tuesday did something sensible and altogether rare: They capped their legal fees. . . . Now, securities law firms hoping to sue corporations on behalf of the Sunshine State's retired civil servants will have to make do with a measly $50 million, plus expenses, per case. That big number is a giant step away from the status quo, in which law firms shower state officials, their parties and pension employees with all manner of sweeteners in order to convince them to become plaintiffs in class actions. . . . The fee cap was proposed by Florida's attorney general, Bill McCollum, one of three statewide officials who oversees the nation's third-largest public pension system ($136 billion in assets).

NEW YORK

NY Firms Earn $6 Million in Fees on Bond Sales for New Brooklyn Arena for Nets

By Nate Raymond | New York Law Journal | New York Lawyer

01-27-10 -- Three law firms earned nearly $5.7 million in fees advising on last month's $511 million bond sale used to finance construction of the Nets' arena at the Atlantic Yards project in Brooklyn. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo earned $2.73 million as bond counsel to the Brooklyn Arena Local Development Corporation, according to master closing documents made public Monday and first reported by the blog Atlantic Yards Report. Nixon Peabody, which represented lead underwriter Goldman Sachs, earned $2.33 million. Mintz's team was headed by Jonathan Ballan, and Nixon's was headed by partners Mitchell Rapaport and Peter White.

How Badly Did Am Law Firms Really Fare Last Year?

Drew Combs, The American Lawyer

01-26-10 -- Many in the legal industry are eager to close the book on 2009. That isn't surprising given that low demand for legal services and missed budget projections forced many firms to reassess partner pay packages, lay off attorneys and staffers, cut associate salaries, and delay start dates for law school graduates. . . . But there remains one final chapter to write before that book can officially be closed -- and The Am Law Daily is in the process of writing that chapter with its posts on the financial performance of individual Am Law 100 and 200 firms in 2009. . . . We've already reported on profits and revenue figures for several firms, including Sonnenschein Nath & Rosenthal, where profits per partner dropped by 3 percent, and K&L Gates, where profits per partner rose by 1 percent.

TEXAS  

Judge tells insurer in Stanford case to pay lawyers

By Mary Flood Copyright 2010 Houston Chronicle

01-26-10 -- A federal judge on Tuesday ordered Lloyd's of London to pay for the criminal defense lawyers for R. Allen Stanford and other officers of his company who were indicted for allegedly operating a $7 billion Ponzi scheme. . . . Senior U.S. District Judge David Hittner issued a preliminary injunction and told the Lloyd's insurers to pay the lawyers for Stanford and two co-defendants within 10 days for work already billed, and to keep paying them under a company policy that covers legal costs for directors and officers. . . . Lloyd's has refused to pay for criminal defense after August, when the company's former chief financial officer, James Davis, pleaded guilty to a role in the scheme. Lloyd's insurers determined that the accused defendants participated in money laundering and thus it need not pay. But Davis did not plead guilty to money laundering, and no court has found that anyone involved in the case laundered money.

FEDERAL COURTS

Federal Judge OKs $17.5 Million Settlement in Class Action Over Sprint Fees

Class counsel, led by Carella Bryne, to be paid 33 percent of settlement fund

Mary Pat Gallagher, New Jersey Law Journal

01-22-10 -- A $17.5 million class action settlement against Sprint Nextel over the flat rate fees charged to people who bail out of their cell phone contracts early has won the blessing of a federal judge. . . . The agreement in Larson v. Sprint Nextel Corp., 07-cv- 5325, approved by U.S. District Judge Jose Linares in Newark, N.J., on Jan. 15, provides for $14 million in cash and $3.5 million in activation fee waivers, bonus minutes and credit forgiveness. Any money left over will be used to buy phone cards for U.S. soldiers and their families. . . . The class counsel, led by Carella Byrne Bain Gilfillan Cecchi Stewart & Olstein in Roseland, N.J., will be paid out of the settlement fund. Their cut -- $5,775,000, or 33 percent -- includes $169,518 in expenses.

Click here for a copy of the Court's Order and Opinion .

ILLINOIS  

Not Enough Is Enough:
Firm Sues Client Over $747,500 in Fees

By Lynne Marek | The National Law Journal | New York Lawyer

01-22-10 -- Lawyers sometimes cut clients a little slack when it comes to paying bills on time, but every law firm has its limits. Chicago-based Freeborn & Peters hit the end of its rope this month with one client. . . . On Jan. 11, the firm sued Vehicle Safety & Compliance LLC of Memphis and related entities, including Pittco Capital Partners LP and J.R. Pitt Hyde III, in federal court in Chicago to collect $747,515 in unpaid fees plus interest and the cost of bringing the lawsuit. Freeborn & Peters alleges that it worked out agreements in December 2008 and January and March 2009 with the client for payment of the fees, but the client still fell short after making good on a portion of the charges.

PENNSYLVANIA  

Drinker Biddle Nets $1.8 Million Award in Fee Fight

Gina Passarella, The Legal Intelligencer

01-21-10 -- Drinker Biddle & Reath won a $1.78 million verdict against a former client late last year after the client disputed the alternative fee arrangement the two sides agreed to in a patent litigation matter. . . . Details of the case, Drinker Biddle & Reath v. AgriZap Inc., came to light earlier this month and highlight a type of dispute that rarely makes it to trial and one firms rarely want publicized. . . . After three hours of deliberation shortly before Thanksgiving, a Philadelphia jury found, on a 10-2 vote, that the firm's fees were reasonable. The jurors said client AgriZap had to pay the firm $1,785,876 to cover around $1.5 million in fees and more than $200,000 in costs accrued during two months of preparation and the ensuing February 2007 trial in AgriZap v. Woodstream.

Despite Down Economy, Law Firms Say
They'll Raise Billing Rates

Meredith Hobbs, Fulton County Daily Report

01-15-10 -- Many large law firms are raising billing rates this year despite the recession, according to an Altman Weil survey (pdf). But it's not clear from the survey how much clients' bills will actually increase, if at all.

About 90 percent of the firms that responded said they are raising rates in 2010. The average rate increase was 3.2 percent. . . . Only 8.5 percent of the firms said they were not raising rates this year, and just 1 percent said rates would go down. . . . "It really was surprising," said Ward Bower, a principal at Altman Weil. "When I saw the results, I thought to myself, 'What are these guys thinking?'"

Lehman Bankruptcy Lawyers, Advisers Paid $588.4 Million So Far

By Linda Sandler, Bloomberg

01-15-10 -- Lehman Brothers Holdings Inc. has paid its lawyers and other bankruptcy advisers $588.4 million in the 15 months since it started liquidating, according to a regulatory filing. . . . The restructuring firm Alvarez & Marsal LLC, which provided Lehman with its current chief executive officer, Bryan Marsal, led the payments with $218.3 million in fees for “interim management” through December, according to the filing yesterday with the U.S. Securities and Exchange Commission. . . . Weil Gotshal & Manges LLP of New York was reported by Lehman to have collected $127.1 million through December for acting as the investment bank’s lead bankruptcy law firm, the same amount as Lehman said it had paid through November. Harvey Miller, Lehman’s lead lawyer at Weil Gotshal, didn’t immediately respond to an e-mail seeking comment yesterday.

PENNSYLVANIA  

K&L Gates Passes $1 Billion in Revenue

Richard Lloyd, The American Lawyer

01-15-10 -- K&L Gates passed the $1 billion revenue mark in 2009, the firm announced Friday. The Pittsburgh-based firm saw gross revenue increase by 8 percent, to $1.034 billion, while profits per equity partner (PPP) also increased to $861,000, up 1 percent from $855,000 last year. . . . Revenue growth was driven largely by the firm's March 2009 merger with Chicago-based Bell Boyd & Lloyd, which added 250 lawyers and an office in San Diego. The firm also continued its overseas expansion with new offices in Frankfurt, Singapore and Dubai. . . . Headcount increased from 1,552 attorneys to just over 1,700, including 605 nonequity partners -- the firm added 495 nonequity partners in 2008. With the growth in the total number of lawyers, revenue per lawyer dipped slightly to $610,000, down from $620,000 in 2008.

ILLINOIS  

7th Circuit Blasts Lawyer in 'Mortal Combat' Fee Dispute With Ex-Partners

The court also took to task the plaintiff's appellate attorney for a number of missteps

Lynne Marek, The National Law Journal

01-14-10 -- Illinois class action lawyer Rex Carr's drive to squeeze $20 million in compensatory damages out of his former law firm partners in a fee dispute slammed into a major barrier this week. . . . The 7th U.S. Circuit Court of Appeals not only upheld the lower court's dismissal of the case, but also overturned that court's rejection of sanctions against Carr and his son Bruce Carr. The father and son, who are partners at the East St. Louis, Ill.-based Rex Carr Law Firm, represented the senior Carr in the U.S. District Court for the Southern District of Illinois. . . . "The litigation is groundless," Judge Richard Posner wrote in the unanimous Jan. 12 decision. "The plaintiff is out of control and his lawyers are neglecting their duties as officers of the state and federal courts by failing to rein him in. The district court is directed to assess a proper monetary sanction."

NEW YORK  

Ex-Debevoise Client Raises Nasty Counterclaims in Unpaid Bills Case

Andrew Longstreth, The American Lawyer

01-14-10 -- Last month, when the New York Law Journal ran a front page article about Debevoise & Plimpton 's suit against a former client for $6 million in unpaid legal bills, the NYLJ's Nate Raymond astutely noted the risks associated with such a move. "If I were advising any law firm, I would tell them suing a client over fees is a no-win situation," John Marquess, president of Legal Cost Control, told Raymond. "It's going to get you adverse publicity you may or may not recover from. And if it went before a jury, juries hate lawyers." . . . Marquess's point about adverse publicity has turned out to be prescient. On Wednesday morning, Debevoise's erstwhile client, Candlewood Timber Group, filed an answer and counterclaims (pdf) against Debevoise, seeking damages of $55 million. And some of Candlewood's allegations about its former law firm aren't very flattering.

Howrey Collects $1 Million Fee From Weld for Counsel in Kentucky School Probe

Nate Raymond, New York Law Journal

01-14-10 -- William Weld, the former governor of Massachusetts and a one-time New York gubernatorial hopeful, is in the process of paying a legal bill of more than $1 million to Howrey following a fee dispute that went to arbitration last year. . . . Howrey had represented Weld in a grand jury investigation and other litigation arising from an accreditation and student-loan scandal at Decker College in Louisville, Ky. . . . Weld served as a Decker board member and as chief executive officer for the school for 10 months before it filed for bankruptcy in 2005.

GENERAL

Great Responsibility Comes With Great Pay,
GC Survey Shows

Amy Miller, Corporate Counsel

01-13-10 -- It's one of the big taboos -- don't ask anyone about his or her salary. But we don't mind when other people do the asking. In fact, when we publish our annual GC Compensation survey, a lot of our readers seem very, very interested in what their counterparts elsewhere earn. . . . We aren't the only nosy ones, poking around in corporate proxy statements. The executive compensation firm Equilar has just done its own survey. Main finding? General counsel earned on average about $1.4 million in 2009. . . . "Pay and focus on the GC role looks like it is growing because of greater responsibility," said Aaron Boyd, compensation research manager at Equilar. "You've got the increase in traditional effort as companies look to protect IP and have had more M&A activity along with the legal group's required focus in other areas."

Slew of Client, Fee Details Found in Proposals From Fla. Pension Fund Beauty Contest

Alison Frankel, The American Lawyer

01-13-10 -- We sincerely wish that every state pension fund would follow Florida's lead in picking a panel of plaintiffs firms for securities class actions. As we've previously reported, the Florida selection process has been conducted with unprecedented transparency, with even an anonymous letter accusing one contestant, Bernstein Liebhard, of financial impropriety made public. (Bernstein Liebhard will offer an equally public defense at a hearing scheduled for Thursday.) . . . Now we've got our hands on the complete responses of 11 leading plaintiffs firms to Florida's detailed request for proposals, thanks to those good folks at the Florida State Board of Administration. They're filled with interesting tidbits about the firms' history and records -- Grant & Eisenhofer's response (pdf), for instance, reports that only two cases initiated by the firm have been dismissed. We hadn't previously known, as Berman DeValerio's proposal (pdf) indicates, that the firm actively lobbied California state legislature on behalf of pension fund clients, or that Richard Kilsheimer is not an equity partner at the firm that bears his name, according to Kaplan Fox & Kilsheimer's submission (pdf) .

NEW YORK  

Ex-Associate's Suit Proceeds Against Labaton Over Origination Fees

Nate Raymond, New York Law Journal

01-12-10 -- A former associate at Labaton Sucharow can pursue nearly $12 million in legal fees he claims his ex-employer owes him for his role in bringing in New Mexico's pension funds as clients, a New York state judge has ruled. . . . Although Manhattan Supreme Court Justice Barbara Kapnick dismissed a series of claims brought by Jon Adams against Labaton, including fraud, unjust enrichment and negligent misrepresentation, she left in place what she called the "big issue" -- Adams' claim that the firm breached an agreement by not giving him a share of multimillion-dollar fee awards stemming from securities settlements with HealthSouth Corporation, St. Paul Travelers, and other cases. . . . Kapnick also lifted a discovery stay and ordered the law firm to answer Adams' complaint.

PENNSYLVANIA  

Attorney goes after Whitman group for nonpayment: Bochetto owed 122G; debt could shutter Council

By Chris Brennan, Philadelphia Daily News

01-11-10 -- The Whitman Council, a South Philly community group, was visited last week by sheriff's deputies who took a good look around the office and tallied up all the stuff that can be seized. . . . It's payday for attorney George Bochetto, who represented three members of the group's board of directors in a 2005 lawsuit and has been seeking payment for his legal fees since. . . . Whitman Council president Mark Squilla said that Bochetto's efforts may shutter the group, which gets most of its funding from government grants. . . . Bochetto won a court judgment of $122,789 against the Whitman Council in July after the group didn't respond to a lawsuit. A judge last week allowed Bochetto to seize the group's bank accounts and other assets. . . . "We don't have the money to pay him and we'll never have $100,000," Squilla said. "What he has done in turn is try to close down the organization."

NEW JERSEY  

$165 Million Schering-Plough Class Action Settlement Includes $37 Million in Fees

Mary Pat Gallagher, New Jersey Law Journal

01-08-10 -- A federal judge in Newark, N.J., has approved a $165 million settlement of a securities fraud suit against Schering-Plough Corp. that includes more than $37 million for the plaintiffs lawyers. . . . U.S. District Judge Katharine Sweeney Hayden, in signing off on the deal Dec. 31, noted it was one of the five largest securities class action recoveries in the District of New Jersey. The largest was an agreement by Cendant Corp., approved in 2000, to pay $2.85 billion. . . . The suit just settled, In re Schering-Plough Securities Litigation, 01-cv-0829, accused the Kenilworth company -- now a part of Merck & Co. -- of misleading investors by failing to disclose deficiencies in the manufacture of Clarinex that led the Food and Drug Administration in 2001 to delay its approval.

DISTRICT OF COLUMBIA  

Former Partner Gets a Second Shot at Sonnenschein in Fees Dispute

Leigh Jones, The National Law Journal

01-06-10 -- Former Sonnenschein Nath & Rosenthal partner Douglas Rosenthal will get a second shot at litigating damages in a compensation battle against his old firm -- if he wants to. . . . The D.C. Court of Appeals has granted Rosenthal, now a partner at Constantine Cannon in Washington, a new trial for a portion of what he claims the firm owes him for generating about $18 million in fees while representing clients suing the Libyan government for the terrorist bombing of a Pan Am jet over Lockerbie, Scotland, in 1988. . . . Rosenthal turned to the appeals court last year after a D.C. Superior Court judge slashed his $3.7 million jury award against to just $65,639. . . . In an unusual step, the appeals court also offered Rosenthal the option of accepting the jury's original decision for some of those fees -- without the trial judge's reductions -- and moving on. It noted that although Rosenthal had not argued for such an option, it would give him the choice since a failure to do so would be "a gross mismanagement of the resources of a busy trial court."

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December 2009

NEW JERSEY  

Bullet-Point Summary of Services Ruled Inadequate for Enhanced Fee Award

Michael Booth, New Jersey Law Journal

12-30-09 -- A plaintiffs lawyer fired midway through a personal injury case will have to provide a court with more than just a conclusory presentation of the work he did if he wants to share in the settlement, says a New Jersey appeals court. . . . In Monday's ruling, Ostretsov v. R. Fraley & R. Mortensen Inc. , A-3021-08, the court said Hackensack, N.J., solo Alexander Fishbeyn's "bullet point" recitation of services performed did not state the monetary value of his time, identify the approximate time spent on each task or set forth the overall hours devoted to the plaintiff's case. . . . The panel directed Bergen County Superior Court Judge Richard Donohue to conduct a more thorough hearing to determine whether Fishbeyn deserved more than the $13,000 awarded him out of the $217,000 settlement.

NEW YORK  

Lawyer's Misconduct Costs Him Any Share of $1.2 Million Fee

Daniel Wise, New York Law Journal

12-29-09 -- A maritime lawyer's misconduct, including his flight from New York to avoid arrest on contempt charges, has disqualified him from sharing in a contingency fee for work performed prior to his disbarment, a Southern District of New York bankruptcy judge ruled last week. . . . Disbarred lawyer Kenneth Heller's refusal to turn over files in a matter that ultimately was resolved with a $3.7 million settlement was "symptomatic" of a 24-year record of "utter contempt for the judicial system," Southern District Bankruptcy Judge Stuart M. Bernstein wrote, quoting from an opinion of the appeals court in Manhattan that disbarred Heller in 2004. . . . Bernstein's ruling in In re Ruby G. Emanuel, 97-44969, denied Heller any share in the $1.2 million the judge had awarded to the law firm of Jacoby & Meyers, which took over from Heller the wrongful death case of James Emanuel, a stevedore who was fatally injured in a 1992 accident at the Brooklyn Navy Yard.

MICHIGAN  

Michigan Faces Constitutional Case Over Cash-Strapped Public Defenders

Tresa Baldas, The National Law Journal

Are Michigan's public defenders improperly pushing the poor into copping pleas? The Michigan Supreme Court will consider that question this spring when it hears a case challenging how publicly appointed lawyers represent poor criminal defendants. . . . At issue is whether cash-strapped public defenders are violating the constitutional rights of defendants by allegedly too eagerly encouraging plea bargains, as opposed to vigorously fighting the charges. Indigent defendants in three Michigan counties -- Muskegon, Berrien and Genesee -- are suing the state over what they claim is an underfunded and inadequate public defender system.

CALIFORNIA  

Small Law Firm Woos Clients With Monthly Subscription Fees
Petra Pasternak, The Recorder

12-23-09 -- When lawyers Todd Smithline and Raj Jha negotiate terms with a new client, they never bring up the billable hour anymore. For the last two years, their five-lawyer San Francisco firm, Smithline Jha, has made an almost complete switch from traditional billing to a monthly subscription model. . . . "We did find all this tracking of hours and dealing with conversations around rates to be distracting, and we didn't think the billable hour was a good way to measure the value of the services we provided," said Smithline, who estimates that more than 90 percent of the firm's revenue can now be attributed to such monthly subscriptions. . . . Alternative billing of all stripes is becoming more popular, particularly given the economic climate -- and client leverage -- of the last couple of years. But observers say few firms are focusing on monthly flat fees to the extent that Smithline Jha does.

GENERAL

A Look Back at Law Firm Profits Over the Last Decade

Karen Sloan, The National Law Journal

12-23-09 -- The past decade was bookended by the dot-com bubble burst and the present economic crisis, but it's easy to forget that the bulk of the decade was pretty darn good for the legal industry. . . . Rising profits and headcounts, abundant work, overseas and domestic expansion, mergers and stability marked the period between 2003 and 2007 for most large law firms. The largest 250 law firms in the country added 35,438 attorneys to their ranks between 2000 and 2008. That nearly 37 percent increase outpaced the growth of the 1990s, when the largest 250 firms grew 30 percent with an additional 20,559 attorneys. . . . Headcount growth allowed law firms to capitalize on the strong demand for legal services that came along with the prospering national and international economies, said DLA Piper managing partner Frank Burch.

NEW YORK  

Attorney Can Seek to Recover Fees Despite Faulty Retainer, Panel Says

Daniel Wise, New York Law Journal

12-23-09 -- An appeals panel in Manhattan last week ruled that an attorney who failed to comply with a court rule covering retainer agreements and who was discharged by his client can nevertheless recover the value of services provided to the client. . . . The Appellate Division, 1st Department's unanimous ruling in Nabi v. Sells, 1378, 1378A, narrowed a lower court ruling that would have permitted the lawyer, Derek S. Sells, who had not complied with the 2002 court requirement that clients be given retainer letters, to recover on the terms outlined in an agreement he claimed he had with Massod Nabi. . . . Nabi, a native of Pakistan who was the vice president of a financial firm, was on the verge of finalizing a $1 million settlement for employment discrimination in 2006 when he discharged his lawyer, Sells.

CALIFORNIA  

In FedEx Fee Fight Case, Judge Finds Lawyer Solicited Cash From Clients

Dan Levine, The Recorder

12-22-09 -- Meeting a client at McDonald's to pick up $15,000 in cash has landed San Francisco plaintiffs lawyer Waukeen McCoy in serious trouble. . . . After settling part of a civil rights claim against FedEx Corp., McCoy solicited cash payments from three plaintiffs above and beyond his contractual fees, according to an order from Northern District of California Judge Susan Illston. McCoy engineered the payments just weeks after he promised Illston - verbally and in writing -- that he would not seek additional money, Illston wrote Friday. . . . "Regardless of whether he did or did not technically perjure himself, there is no question that Mr. McCoy violated the spirit of that declaration as well as his representations to this court," the judge wrote.

Attorneys Fees in Cobell Case 'Well Below the Norm' in Class Actions

Mike Scarcella, The BLT: Blog of Legal Times 

12-18-09 -- The lawyers suing the government in the Indian trust litigation in federal district court in Washington agreed to a range of legal fees that is well below the norm for class actions in hope of making the deal more palatable to the class, a lead attorney for the plaintiffs said. . . . The Justice Department earlier this month reached a tentative settlement with the plaintiffs in Cobell v. Salazar, a suit that has dragged on for more than 13 years with no end in sight. The more than 300,000 class members are seeking an historical accounting of the government’s handling of billions of dollars in royalties flowing from Indian land. . . . The $1.41 billion settlement, a far cry from the billions the plaintiffs had been seeking, requires authorization from Congress—and, ultimately, approval from the presiding trial judge, James Robertson, in the U.S. District Court for the District of Columbia. Justice attorneys and counsel for the plaintiffs say Robertson was integral in supervising settlement negotiations, which ramped up in July following an appellate court ruling that kicked the case back to the trial court.

NEW YORK  

Challenge to $40 Million Contingency Fee Now in Referee's Hands

Attorney for client's estate argued that three Graubard Miller lawyers were in a 'conspiracy of silence' regarding monetary gifts from the client

Nate Raymond, New York Law Journal

12-17-09 -- The question of whether Graubard Miller deserved a $42 million contingency fee from a settlement it obtained just five months after its client agreed to switch from paying hourly rates is now in the hands of a referee in New York. . . . In closing arguments Wednesday in Manhattan Surrogate's Court, Mark Zauderer, an attorney for the law firm, contended that Graubard Miller deserved the full 40 percent contingency fee on the $104.8 million settlement for Alice Lawrence, the widow of a New York real estate magnate. . . . But Daniel Kornstein, who represents Mrs. Lawrence's estate, insisted Mrs. Lawrence "did not understand the ramifications" of changing her fee arrangement because of medication she was using after knee surgery that made her "spacey" and "dizzy."

Inside Jones Day's 685-Page Lehman Fee Application

Zach Lowe, The American Lawyer

12-16-09 -- On Monday, our colleague Brian Baxter reported that Weil, Gotshal & Manges had soared past the $120 million mark in billings for the Lehman Brothers bankruptcy. . . . The $12.3 million Jones Day has billed from the beginning of the case last September is a pittance in comparison. But the firm's latest fee application, filed Tuesday, goes into a level of detail we've rarely -- if ever -- seen. The document, which covers $9 million in fee and expense requests from June 1 through the end of September, runs a whopping 685 pages and lists every action any Jones Day lawyer (or staffer) took in the case. . . . Every cab ride, every photocopy, every late-night food delivery -- it's all there, and it presents an exhaustive portrait of what it's like to work on a case of this magnitude. 

NEW YORK  

Quinn Emanuel Requests $1 Million for Work on N.Y. Governor's Case

Joel Stashenko, New York Law Journal

12-14-09 -- The legal team from Quinn Emanuel Urquhart Oliver & Hedges that ultimately won recognition of New York Gov. David A. Paterson's authority to appoint Richard Ravitch to fill the lieutenant governor's post has requested $1 million for its work on the case. . . . Paterson's spokesman, Peter Kaufman, said Friday that the request for the $1 million payment by the governor's chief counsel, Peter Kiernan, was filed with the state comptroller's office on behalf of Quinn Emanuel and its attorneys Kathleen M. Sullivan, Faith E. Gay and Robert Juman. In it, Kiernan said that Quinn Emanuel had "unique experience, expertise and capacity" to handle the complex case and the constitutional questions involved in it. The request does not detail the hours worked by individual lawyers or others, but said 23 "professionals" worked "around the clock" between July 7 and Sept. 22 to meet court deadlines and prepare the litigation, Kiernan said.

GENERAL

Lawrence W. Schonbrun:
Class-action lawyers picking their clients’ pockets

Another Voice / Lawsuit reform

By Lawrence W. Schonbrun

12-11-09 -- Plaintiffs’ class-action lawyers, in collaboration with the very defendants they sue on our behalf, have worked out a Dickensian scheme that is keeping millions, tens of millions, or perhaps even hundreds of millions of dollars (it’s hard to know for sure) in class-action settlement recoveries out of the pockets of class members. . . . How do they do this, you might ask? Rather than settling these cases like a typical contingency fee case, these artful dodgers of the legal world are negotiating their fees with the defendants after (or so they claim) and separate from any recovery they negotiate for us class members. In doing so, class-action lawyers are able to enrich themselves at the expense of their clients, while the courts look the other way. . . . Let me explain. Take the case of a typical personal injury accident. Assume you were injured in a car accident and hired a lawyer. The lawyer comes to you one day, gives you a check and tells you that your case has been settled. When you ask about his fee, he tells you not to worry, that you won’t have to pay him anything because he will be paid by the insurance company.

Lawyers in T-Mobile Settlement Can't Press for Higher Fees in State Court

Mary Pat Gallagher, New Jersey Law Journal

12-10-09 -- A federal judge in New Jersey has nixed an attempt by lawyers unhappy with their fees from a $13.5 million class action settlement with T-Mobile to re-litigate the issue in California state court. . . . U.S. District Judge Jose Linares on Tuesday granted T-Mobile's motion to block what it called an attempted "do-over" on the fees that would violate the national settlement, undermine his jurisdiction and waste court resources. . . . The lawyers, who are non-class counsel in a suit over the $200 T-Mobile charges for opting out of a cell phone plan before the end of the contract, wanted about 80 percent of the $4.5 million in fees awarded in the settlement of Milliron v. T-Mobile USA, Inc. , 08-cv-4149, which Linares approved Sept. 10.

FLORIDA  

Ho! Ho! Ho!: Santa Comes Early for Firm With $5 Million Bonus on Fees

By Vanessa Blum | Daily Business Review | New York Lawyer

12-09-09 -- Over opposition from the Securities and Exchange Commission, attorneys have been awarded a $5 million bonus for their work unraveling one of the region’s largest investment frauds. . . . Roberto Martinez, the court-appointed receiver for Fort Lauderdale-based Mutual Benefits, sought additional compensation of $11 million for his law firm Colson Hicks Eidson and primary counsel Kozyak Tropin Throckmorton. The two firms previously received $3.8 million in legal fees over five years. . . . Though short of the receiver’s request, the total fee award of $8.9 million boosts the blended rate for both partners and associates to $450 per hour. . . . In a seven-page order Monday, Chief U.S. District Judge Federico Moreno said the attorneys had been compensated since 2004 at rates far below what was reasonable for their work. He ordered the additional fees be paid from unclaimed investor funds and a corporate operating account.

NEW YORK  

Federal Judge Approves Solo's Manhattan-Level Fees in 'Hotly Contested' Discrimination Suit
Vesselin Mitev, New York Law Journal

12-09-09 -- Manhattan lawyers who represented a Long Island, N.Y., police officer in a "hotly contested" labor discrimination suit should be paid attorney fees consistent with Southern District of New York market rates, a federal judge has ruled. . . . Citing the "considerable experience" of Janice Goodman, a veteran Manhattan solo practitioner, and Gillian Thomas, a former attorney for the women's defense fund Legal Momentum, Eastern District of New York Judge Arthur D. Spatt ordered Suffolk County to pay $207,000 in attorney fees in Germain v. County of Suffolk, 07-cv-2523. . . . Suffolk County had sought to pay a maximum of $150,000 based on its calculation of the customary rate in the Eastern District, which includes the county.

In Rare Move, Debevoise Sues Client Over $6 Million in Unpaid Bills

Nate Raymond, New York Law Journal

12-09-09 -- After years of wrangling over more than $6 million in unpaid legal fees, Debevoise & Plimpton has taken a timber company to court over its refusal to pay the bill. . . . Debevoise sued Candlewood Timber Group LLC last month in Manhattan Supreme Court after its former client did not pay the multimillion-dollar tab arising from litigation in 2006 over rain forest damage in Argentina. . . . Candlewood, in documents filed in an earlier proceeding trying to block the firm's arbitration demand, said Debevoise does not deserve the "exorbitant" $6 million sum, claiming it overstaffed the matter with associates of "no apparent skill" and was replaced by another firm for trial.

TEXAS  

Did lawyer/lobbyists work for justice or financial gain?

Fort Worth Star Telegram Editorial

12-08-09 -- Texas taxpayers didn’t contract to pay lobbyists more than $1 million to get the Tim Cole Act enacted into law. . . . But that will be the practical effect if a wrongly convicted Carrollton man can’t get a contract with a lawyer/lobbyist revoked. . . . Steven Phillips spent 25 years in prison, convicted in Dallas County of a rape he didn’t commit. DNA evidence finally showed that another man was responsible, and Phillips was officially exonerated in 2008. . . . After being convicted, he avoided a life sentence by pleading guilty to other offenses he hadn’t committed. He has court orders exonerating him on those counts, too. . . . Last December, broke and living in Springfield, Mo., Phillips signed a contingency fee contract with a Lubbock law firm that loaned him $3,400. Under the contract, Glasheen, Valles & Dehoyos would "investigate, evaluate and pursue to settlement or judgment all claims for damages" that Phillips might have against the City of Dallas and State of Texas. . . . Lawyer Kevin Glasheen and his firm didn’t pursue legal claims on Phillips’ behalf, Phillips asserts. But they want attorney fees of 25 percent of the money the state owes him as compensation for time wrongly served. . . . In a lawsuit filed in Dallas, Phillips claims the fees are excessive and that they’re for lobbying services he never contracted for. . . . Once court orders showing Phillips wrongly served 25 years and was exonerated on all counts are filed with the comptroller, he would be entitled to a $2 million lump sum plus an $80,000 annuity, potentially $4.1 million.

Cash Still the Best Feedback When Pressing Law Firms for Value, Says GC

Amy Miller, Corporate Counsel

12-4-09 -- Call it a perfect storm for the billable hour. . . . After seeing years of skyrocketing legal fees, the legal marketplace has been hit hard by the faltering economy and shrinking in-house legal budgets, turning both general counsel and outside counsel into advocates for change. . . . And the change many are calling for loudly these days is the death of the billable hour. So it's no surprise that dozens of in-house lawyers and outside counsel gathered at the Harvard Club of New York City Tuesday and Wednesday to talk about the challenges and rewards of alternative billing arrangements.

An Increase in Hourly Rates? Get Ready for a Fight

Zach Lowe, The American Lawyer

12-3-09 -- Last month, Susan Blount, the general counsel of Prudential Financial, sent a letter to the 60 law firms the insurance giant uses regularly. The letter addressed the general economy and the need to cut costs, but one announcement stuck out: Prudential informed the firms that in calendar year 2010, the company expected to pay for legal services at 2008 hourly rates. It wasn't a request as much as a take it or leave it deal, Blount says. . . . "The response," Blount says, "has run the gamut, from acceptance to disgruntled acceptance to firms saying, 'You just don't understand!'" . . . Blount, of course, is not alone in her quest to control legal costs. Law firm and legal department consultants say GCs are looking for at least a freeze on rates in the coming year. Many are asking for cuts to 2009 billing rates of as much as 15 percent, says Ward Bower of Altman Weil. . . . Paul Hurd, general counsel of Daimler Trucks North America, says already instituted a significant rate cut a year ago, when he asked the 75 firms Daimler uses to set 2009 billing rates at about 90 percent of 2008 rates. What does he have in mind for 2010? Hurd says Daimler will ask firms to stick with the current hourly rate. That translates to an hour rate in 2010 that is lower than the firms' 2008 rates.

Survey Shows the Bell Is Tolling for the Billable Hour

Amy Miller, Corporate Counsel

12-1-09 -- Companies are successfully pushing their outside counsel to abandon the billable hour, a new survey indicates. . . . In October, The American Lawyer and the Association of Corporate Counsel jointly surveyed 587 general counsel and chief legal officers, and found that 39 percent paid law firms more money this year under alternative fee arrangements than they did in 2008. Meanwhile, just over half (53 percent) said spending on alternative fee arrangements had stayed the same. Only 8 percent said it had fallen. . . . The results weren't surprising to Susan Hackett, general counsel for the ACC. The increase might have been more substantial, had many cash-strapped general counsel not turned to the quick fix of rate discounts, rather than alternative fee arrangements. But the results nevertheless prove that the legal profession is finally moving away from the billable hour -- for good.

November 2009

NEW JERSEY  

$163K Fee Award to Firm Tossed Out Over Use of Secret 'Master Retainer'

By Mary Pat Gallagher | New Jersey Law Journal | New York Lawyer

11-30-09 -- An appeals court on Tuesday threw out $163,000 awarded to a firm in a suit against former clients, finding it violated ethics rules by not providing a full copy of its retainer agreement until seven months into the representation. . . . The Appellate Division also said the firm, Alpert Butler & Weiss of West Orange, could not recover legal fees as a sanction for frivolous litigation because it handled the matter pro se. . . . The ruling, in Alpert, Goldberg, Butler, Norton & Weiss v. Quinn, A-5503-07, came in a fee action against Michael and Marita Quinn, who hired the firm in January 2006 to replace prior counsel in litigation against Banc of America Leasing & Capital in Cape May County.

Orrick-Levi Strauss Deal Underscores Growth of Alternative Billing

Amanda Royal, The Recorder

11-24-09 -- Karen Johnson-McKewan has been wearing her Levi's a lot lately, and her colleagues at Orrick, Herrington & Sutcliffe don't mind at all. . . . Earlier this year, Johnson-McKewan inked a deal with client Levi Strauss & Co. that is Orrick's broadest alternative fee arrangement ever. . . . Orrick will handle all of Levi Strauss' legal work worldwide in exchange for a fixed yearly fee paid in monthly increments. Levi Strauss will keep only one other firm, Townsend and Townsend and Crew, to continue its brand protection work. Where Orrick doesn't have an office, the law firm itself will retain and pay outside counsel.

AT&T class wins $21.20 in phone line credits; lawyers get $7 million in fees

By Steve Korris, Madison County Record

11-20-09 -- Madison County Circuit Judge Daniel Stack has ordered telephone company AT&T to pay $21,671,857 for mistakes Illinois Bell made eight years ago in distributing $90 million in refunds to business customers. . . . On Nov. 10, Stack placed a price tag on a February order holding AT&T liable for misinterpretation of state law that prescribed the refunds. . . . He ruled that 680,683 business customers deserved refunds but didn't get them. . . . He ordered AT&T to grant class members credits of $21.20 per line. . . . He awarded a third of the judgment, more than $7 million, to class action lawyers Terrence O'Leary of Granite City, Glenn Bradford of Edwardsville, Thomas Londrigan and Timothy Londrigan of Springfield, and Mary Leahy of Springfield.

Ditching the Billable Hour: 'Everyone Wants to Do It'

Amy Miller, Corporate Counsel

11-20-09 -- More companies are paying their outside counsel off the clock, according to the Hildebrandt 2009 Law Department Survey. . . . Just over half of the 231 companies surveyed by the Hildebrandt consulting firm said they either have started or will start negotiating non-hourly billing arrangements with their outside counsel. Just over a quarter said they are considering them. And only 18 percent said they have no plans to abandon the billable hour. . . . The results weren't surprising to Lauren Chung, director of Hildebrandt's law department consulting practice and the survey's editor. "Everyone wants to do it," she says. "But the question is: to what extent? Will they make up 5 percent of legal spending or 100 percent? It will be interesting to see to what extent they will be utilized."

Coudert Estate Pursues Fees Earned From Former Clients

Nate Raymond, New York Law Journal

11-20-09 -- The liquidation plan administrator for the Coudert Brothers estate is claiming that Baker & McKenzie has breached an agreement with the defunct law firm by failing to hand over a portion of a contingency fee earned from work for former Coudert clients. . . . By not handing over the fees, Baker & McKenzie breached an agreement signed with Coudert in 2005 that gave Coudert rights to part of the fee, according to an amended complaint filed last week in bankruptcy court by the administrator. Baker & McKenzie last year resolved a series of cases involving taxes on coal exports for clients brought to the firm by former Coudert attorneys. . . . In a statement this week, Baker & McKenzie said, "We deny any wrongful conduct in this matter, and because it is pending, we will offer no further comment on the matter at this time." . . . The Southern District Bankruptcy Court approved its plan of liquidation in August 2008 in In re Coudert Brothers LLP, 06-12226.

How to Shift Law Firms to a Performance-Based Compensation System

Dan DiPietro, Lisa Keyes, Laura Saklad, The American Lawyer

11-19-09 -- The legal industry loves its traditions, and one of the most entrenched -- embraced by virtually every Am Law 100 firm -- is lockstep associate compensation. But over time, even the best traditions can become anachronisms, and that is the case with lockstep. For several years, the Law Firm Group (LFG) at Citi Private Bank has been urging firms to get rid of lockstep, in which associates receive an automatic annual pay raise, promotion and bonus. In its place, the LFG advocates a performance-based program, in which associates are paid and promoted according to their mastery of skills and competencies, and receive bonuses based on individual and firm performance. . . . Until recently, the LFG's campaign to kill lockstep fell largely on deaf ears. But the recession brought home many of the problems inherent in lockstep. In the last year, several Am Law 100 firms have announced that they have shifted to, or are in the process of shifting to, a performance-based program. An LFG survey in July revealed that almost half of the top 50 firms in The Am Law 100 said they plan to switch to some form of performance-based system.

GENERAL

Must Law Firms Know the Cost of Each Matter They Take On?

Bruce Carton, Law.com Legal Blog Watch

11-17-09 -- There has been plenty of talk over the past year or so about how the billable hour at law firms is under attack, and how changes may be in store. Of course, most of it is just talk so far, and precious little action, as law firms cling to their traditional ways. . . . One firm that claims to have completely done away with the billable hour, however, is the Shepherd Law Group, which states that it hasn't billed or even tracked a single hour since 2006. SLG, an employment law firm, uses an "Up-Front Pricing" model whereby clients know the fee they will pay in advance. On its Web site, SLG explains that if the scope of the agreed upon job changes, it will send the client a change order setting out the new scope and the price for that change. . . . SLG's CEO, Jay Shepherd, writes a blog called The Client Revolution that is heavily focused on the potential death of the billable hour. In an interesting post yesterday, Shepherd wrote that lawyers remain obsessed with how much their services cost, and continue to claim that they cannot move away from the billable hour to offer fixed prices because of their inability to figure out what a particular case or matter costs.

10 Ways Lawyers Rip-Off Clients

Lawrence Delevingne and Gus Lubin, | The Business Insider

11-16-09 -- Like a sick person, a company facing litigation is willing spend big bucks to get out of a trouble. . . . It's entirely justifiable, and lawyers are only too happy to oblige, billing clients for every minute worked, and then some. . . . But is it possible to get sound counsel coming from someone who just pulled 52 all-nighters in a row? How about paying more than $1,000 for an hour of legal advice? And what about being charged for 26 hours in a single day? . . . Like all consultants, some lawyers find questionable ways to squeeze money out of clients. Some are legal, some aren't, but all will make a CFO's blood boil. . . . So review those invoices, make sure you know billing rates, and kindly remind Dewy, Cheatem and How LLP, that summer associates don't need to stay in VIP suites at the Four Seasons.

See The Top Ways Lawyers Overcharge Clients>>>

NEW JERSEY  

Law firm for UMDNJ removed from trial

Ted Sherman, Star-Ledger Staff

11-15-09 -- More than two years ago, Ellen Casey -- a former high-level purchasing official for the state's medical university -- claimed she was fired after raising questions about millions in lucrative contracts that were never publicly bid. . . . But just as her whistleblower case was set to go to trial, the law firm representing the University of Medicine and Dentistry of New Jersey has been removed by a Superior Court judge over allegations of ethical lapses. . . . Judge Claude Coleman in Essex county found that the firm -- McElroy, Deutsch, Mulvaney & Carpenter of Morristown -- had not been honest with the court over its representation of Casey during an earlier investigation of the university. . . . Coleman said the firm "made misrepresentations to this court," and to lawyers for Casey, ordering it to return $324,662 in legal fees in connection with its representation of the university.

CALIFORNIA  

FTC Seeks Contempt Charges Against Lawyer Who Won't Turn Over Fees

Jenna Greene, The National Law Journal

11-11-09 -- The Federal Trade Commission has filed contempt charges against an attorney for refusing to fork over fees he was paid by the operators of an illegal Ponzi scheme. . . . The lawyer, solo practitioner Jeffrey Benice of Costa Mesa, Calif., was ordered in March 2009 to turn over $238,300 to the FTC by a federal judge in Nevada. The court also imposed an $18.9 million judgment on Benice's clients for running a fraudulent "Internet kiosk" business in violation of the FTC Act and the agency's franchising rule. . . . According to the FTC, the defendants -- Charles Castro, Network Services Depot Inc. and others -- paid Benice a $375,000 retainer in January 2005.

WEST VIRGINIA   

Charleston law firm sues former associate for keeping legal fees in SS cases

By Lawrence Smith  -Kanawha Bureau West Virginia Record

11-11-09 -- A Charleston law firm alleges before going solo, one of its former associates failed to remit legal fees belonging to them. . . . Hendrickson and Long PLLC filed suit on Oct. 30 against Benjamin F. White. In its complaint filed in Kanawha Circuit Court, H&L alleges White, 44, before starting his firm, Benjamin F. White, attorney-at-law, PLLC, improperly received legal fees for Social Security claims he litigated on behalf of H&Ls clients. . . . White's law firm is named as a co-defendant in the suit. . . . According to the complaint, White joined H&L on April 28, 2008 as an associate focusing on Social Security law. As an at-will employee, White's compensation package included a base salary, eligibility for H&Ls bonus program, enrollment in its profit-sharing and health care plans and a line of credit. . . . However, fees he earned while representing Social Security claimants "were earned on behalf of H&L and owed to H&L."

GEORGIA  

Legal Fees Paid by Drug Trafficker at Issue in Ga. Money-Laundering Case

Defense motion signals that recent 11th Circuit decision could determine J. Mark Shelnutt's fate in court

R. Robin McDonald, Fulton County Daily Report

11-10-09 -- Jury selection began Monday in the trial of a Columbus, Ga., criminal defense lawyer who faces federal money-laundering charges stemming from legal fees paid to him by his client, a convicted drug trafficker. . . . Armed with a new ruling by the 11th U.S. Circuit Court of Appeals, Columbus attorney J. Mark Shelnutt's defense team has asked the judge presiding over the trial, U.S. District Judge Clay D. Land, to dismiss 30 counts of money laundering and a money-laundering conspiracy count, saying the grand jury that indicted Shelnutt may have been misled about the law.

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October 2009

FLORIDA  

Lawyers' $11 Million Bonus Request Shocks Judge, SEC

By Vanessa Blum | Daily Business Review | New York Lawyer

10-30-09 -- When Chief U.S. District Judge Federico Moreno first read the final fee request for the Mutual Benefits fraud receivership, he thought lawyers were seeking $1.1 million, not $11 million. . . . Then he realized there was no decimal point, the judge recounted Thursday at a hearing in Miami. . . . “I needed a defibrillator,” he joked. “We’re talking about a lot of money.” . . . It is up to Moreno to resolve a simmering dispute over how richly to compensate lawyers for five years of work on one of the largest scams in South Florida history. . . . Roberto Martinez, the court-appointed receiver, is seeking the $11 million bonus to split between his law firm, Colson Hicks Eidson, and primary counsel Kozyak Tropin & Throckmorton. To date, the two Coral Gables firms have jointly collected about $4 million.

GENERAL

Legal Aid Groups Reap Tobacco Settlement Windfall

Petra Pasternak, The Recorder

10-28-09 -- Christmas has come early for California's legal aid organizations. . . . This month, $40 million is going out to more than 100 nonprofits and charities across the state from money left over in a class action settlement with makers of chewing tobacco. . . . The money -- in some cases hundreds of thousands of dollars -- will help local legal groups avoid cutting services and jobs as they struggle through the recession. . . . A check for $800,000 arrived at the San Francisco office of California Rural Legal Assistance about a week ago. Jose Padilla, its executive director, said CRLA was bracing for a shortage of about half a million dollars next year in its $13 million program, thanks to uncertainty about federal and state funding. The cy pres money will save the organization from having to cut pay by 7 percent through furloughs, or laying off six to eight of its 60 lawyers. "This is a godsend," Padilla said.

FEDERAL COURTS

11th Circuit Sides With Defense Attorney Over Legal Fees

John Pacenti, Daily Business Review

10-27-09 -- In a case of first impression, a federal appellate court ruled Monday in the prosecution of prominent Miami attorney Ben Kuehne that criminal defense lawyers can't be charged with taking ill-gotten proceeds from defendants as legal fees. . . . The 11th U.S. Circuit Court of Appeals affirmed a decision by U.S. District Judge Marcia G. Cooke, who dismissed a money-laundering conspiracy count against the attorney for vetting money that went to Miami celebrity attorney Roy Black to defend Colombian drug kingpin Fabio Ochoa. . . . Kuehne, who has represented a number of high-profile clients including Vice President Al Gore in the 2000 presidential recount, was charged along with two Colombians. Prosecutors charged Kuehne knowingly sent drug money through Colombia's black market peso exchange to pay Black and his team.

ILLINOIS  

Lewistown City Attorney sanctioned, must pay $6,600

By John Froehling of the Canton Daily Ledger, GateHouse News Service

10-23-09 -- Lewistown City Attorney Andrewe Johnson has been ordered to pay $6,600 to the Fulton County Library Fund as a sanction for improperly imposing attorney's fees as part of final judgments for enforcement of the city's ordinances. . . . The sanction equals about three times the amount of 42 final judgments of enforcement of the city's one-hour parking ordinance over a period of approximately 15 months for which the city assessed around $2,200 in attorney's fees. . . . Judge William Davis entered the order Oct. 6 in Fulton County Circuit Court. He admonished the city through its attorney that it has no legal authority to seek or impose attorney's fees in cases yet to be judged for the prosecution of a violation of its ordinances.

FLORIDA  

Ludacris Is the Latest Rapper Sued Over Legal Bills

Karen Sloan, The National Law Journal

10-22-09 -- Money is a popular theme in rap music, but some high-profile MCs appear to be tight-fisted when it comes to paying their legal bills: . . . • Tampa-based firm Carlton Fields filed a lawsuit against Ludacris on Oct. 16 seeking to recover $61,860 that it says the rapper owes in fees. . . . • On Oct. 1, Santa Monica entertainment litigation boutique Kinsella Weitzman Iser Kump & Aldisert sued The Game for neglecting to pay more than $34,683 that the rapper allegedly owes for his defense against a gun charge in 2007. . . . • In July, McGuireWoods partner Michael DiMattia asked a federal judge to allow him to withdraw from hip hop mogul Jay-Z's legal team because he hadn't been paid for work in a labor and employment dispute. . . . The lawsuit against Ludacris, whose real name is Christopher Bridges, is in connection with a "garden variety" car accident in 2007 that involved his mother, Roberta Shields, said Carlton Fields partner Walter Bush.

NEW YORK  

Judge Follows 2nd Circuit in Fee Award but Expresses Dissatisfaction With 'Geographic Lodestar' Model

Mark Fass, New York Law Journal

10-22-09 -- A Brooklyn judge has followed a recent appellate precedent requiring him to consider only the average hourly rates in the Eastern District of New York when assessing attorney fees, rather than those of the broader metropolitan area, including Manhattan, where the plaintiffs' firm is located. . . . But in a lengthy footnote, the judge set forth the reasons he believes he should not have had to make that decision. . . . "[T]he border between the Eastern and Southern Districts of New York is uniquely permeable," Judge Brian M. Cogan wrote in Gutman v. Klein, 03 Civ. 1570. "Imposing the Simmons burden on litigants ignores the 'geographic reality and its economic consequences in New York City.'"

Lawyer’s Lament:
Pressure to Review 80 Docs an Hour, for $23 an Hour

By Debra Cassens Weiss, ABA Journal

10-21-09 -- A contract lawyer’s complaint about a directive to review 80 documents an hour is raising questions about whether quantity sacrifices quality. . . . The lawyer, who was being paid about $23 an hour for the document review project, told the blog Temporary Attorney that the directive was in this e-mail: “Please pick up the pace. They are expecting you to do about 80 docs an hour and all of you are less than half that. Changes will be made soon if this does not change asap.”

DISTRICT OF COLUMBIA   

Williams & Connolly Sues Client for $2 Million

Jordan Weissmann, The National Law Journal

10-20-09 -- It's not uncommon these days to see law firms suing former clients over unpaid legal bills (see, for instance, McDermott Will & Emery's recent $606,000 case). Still, this latest bit of legal fee litigation seems remarkable: Williams & Connolly is taking a former client to court over $2 million after the company practically invited the firm to sue. . . . Or so says Williams & Connolly's complaint, filed Friday at the U.S. District Court for the District of Columbia. According to the filing, the firm billed telecommunications company IDT $3 million for representing one of its subsidiaries in a patent case. Afterwards, in September 2008, IDT's CEO allegedly traveled to Washington to meet with Williams & Connolly heavy hitter Brendan Sullivan Jr. in order to work out a payment plan. They agreed to a deal where IDT would pay three installments of $1 million dollars over two years.

CALIFORNIA

Lawyers Vexed by New Law Barring Up-Front Fees for Mortgage Modification Work

Cheryl Miller, The Recorder

10-19-09 -- Backers of a new law that bars mortgage modification services from charging up-front fees (pdf) say the rules will put scam artists out of business. . . . But mortgage lawyers like Paul Molinaro wonder whether the new regulations will really just drive honest attorneys out of the practice. . . . "I think you're going to see a lot of lawyers not doing this anymore," said Molinaro, a founding partner in the Corona, Calif., firm of Fransen & Molinaro. "It's just not worth it." . . . Gov. Arnold Schwarzenegger this month signed Senate Bill 94, a response to complaints from desperate homeowners who have paid thousands of dollars in fees to mortgage modification services, only to learn later that the business did little or nothing to save their homes from foreclosure.

UNITED STATES SUPREME COURT

High Court Justices Doubt Lawyers Should Be
Paid Extra for Winning

Tony Mauro, The National Law Journal

10-15-09 -- The nine justices of the U.S. Supreme Court are all lawyers, but most showed little empathy for their fellow attorneys on Wednesday as they debated whether legal fee awards can be enhanced for superior performance or exceptional results under a federal fee-shifting statute. . . . The justices heard arguments in Perdue v. Kenny A., brought by the state of Georgia to challenge a $4.5 million fee enhancement it was ordered to pay by a district court judge to reward lawyers who succeeded in reforming the state foster care system in a long-running class action. The enhancement would be on top of a $6 million "lodestar" award based on prevailing fees and hours billed. Lawyers for Children's Rights Inc. and a private Atlanta firm worked on the case. . . . Civil rights groups from across the political spectrum are watching the dispute, asserting that the prospect of enhanced fees is necessary to attract quality representation in the lengthy and complex litigation they pursue. But during the hourlong argument, several justices seemed more worried about high legal fees than in encouraging quality lawyers to do public-minded work.

FLORIDA  

Top South Florida Attorneys' Billing Rates Rise in 2009

Vanessa Blum, Daily Business Review

10-14-09 -- Charge for two Miami litigation partners to attend a one-day deposition of celebrity socialite Paris Hilton: $14,000 plus travel. . . . Outside legal fees accrued by government agencies to defend the administration of Florida's Medicaid program for children: up to $94,000 a month. . . . Hourly billing rates for lawyers representing Fontainebleau Las Vegas Holdings in tumultuous federal bankruptcy proceedings: $370 to $700. . . . Those charges -- a glimpse at the current price tag for legal services in South Florida -- were found among more than 150 court filings and legal bills reviewed by the Daily Business Review in its fourth annual survey of lawyer compensation. [See the Daily Business Review's full coverage, Lawyer Compensation (registration required).]

UNITED STATES SUPREME COURT

Conservative, Liberal Groups Unite in Legal Fee Case at High Court

Marcia Coyle, The National Law Journal

10-13-09 -- An attorney fee case -- the first of two important fee challenges to be decided by the Supreme Court this term -- has created an unusual alliance among a host of public interest legal organizations spanning the political spectrum. . . . From the conservative Liberty Legal Institute in Texas to the liberal American Civil Liberties Union, the groups are backing Children's Rights Inc. in New York, in Perdue v. Kenny A., which the justices will hear on Wednesday. . . . The high court case asks whether an attorney fee award under a federal fee-shifting statute can ever be increased above the basic fee calculation because of the attorneys' outstanding performance and the results they obtained.

NEW YORK  

Firm Rebuffed on Bid to Recoup Costs of Failed Medical Malpractice Suit

Says judge in ruling: '[T]he following illustrates why members of the public may hold cynical views of the legal profession'

Noeleen G. Walder, New York Law Journal

10-12-09 -- A Manhattan judge has taken to task some well-known personal injury attorneys for what she called a "nonsensical and frivolous" bid to recoup the costs of an unsuccessful medical malpractice action. . . . "[T]he following illustrates why members of the public may hold cynical views of the legal profession," Supreme Court Justice Emily Jane Goodman began her ruling in Kremen v. Benedict P. Morelli & Associates, 101739/06. . . . Victoria Kremen underwent a double mastectomy after allegedly being misdiagnosed with breast cancer. She accused Morelli Ratner and the now defunct Schapiro & Reich of mishandling the action she brought against her doctors, a suit that was ultimately dismissed because the 2 1/2-year statute of limitations had expired.

GENERAL

$567 Million Fee Award Upheld in Fen-Phen Litigation

Shannon P. Duffy, The Legal Intelligencer

10-9-09 -- A federal appeals court on Thursday rejected challenges to the $567 million attorney fee award in the fen-phen diet-drug litigation, declaring that Chief U.S. District Judge Harvey Bartle III of the Eastern District of Pennsylvania had handled the massive case properly at every step. . . . "The amount of the award, though extraordinarily large, is not excessive in this extraordinary case," 3rd Circuit Judge Kent A. Jordan wrote. . . . Jordan found that Bartle "employed transparent procedures and undertook a thorough and proper analysis -- based on the appropriate information -- in determining the award." . . . The 64-page opinion by Jordan was fully joined by 3rd Circuit Judge Dolores K. Sloviter and partially joined by Judge Thomas L. Ambro. . . . Ambro wrote a partial dissent, saying he believed lawyers whose clients opted out of the settlement may have been treated unfairly in how much they were ordered to contribute to the fees of the class lawyers.

Cadwalader Slashes Billing Rates for Treasury Work

Jenna Greene, The National Law Journal

10-9-09 -- Cadwalader, Wickersham & Taft steeply discounted its billing rates for work on behalf of the Treasury Department related to the Troubled Assets Relief Program. . . . Documents obtained from the Treasury Department under a Freedom of Information Act request show that Cadwalader partners normally charge between $625 to $1,050 per hour. But for 500 hours of work advising the department on "highly complex bankruptcy issues in order to appropriately structure possible Treasury loans or to other investments in multiple large institutions," the price was $525 an hour. . . . Cadwalader associates who typically charge $310 to $575 an hour cost the government $287.50 per hour for 150 hours of work. Special counsel cut their rates to $440, down from $590 to $880 per hour, and performed 275 hours of work. Legal assistants were $125 per hour. The total contract, which was issued on Dec. 15, 2008, was worth $417,562.50. . . . According to the government, Cadwalader "expressly consented" to having its rates revealed. The other firms named in the FOIA request -- Simpson Thacher & Bartlett; Venable; Locke Lord Bissell & Liddell; and (now defunct) Thacher Proffitt & Wood -- claimed the billing rate information was exempt from FOIA because it was confidential commercial or financial information.

NEW JERSEY  

Lawyer Chided for Dragging Out Deal in Blue Cross Suit

Henry Gottlieb, New Jersey Law Journal

10-9-09 -- A federal judge on Wednesday accused a class action lawyer of trying to delay a settlement that helped nearly 600 eating disorder patients so he could pursue a fight with a co-counsel over shares of a $2.45 million fee award. . . . U.S. District Judge Faith Hochberg in Newark, N.J., told David Mazie of Roseland, N.J.'s Mazie Slater Katz & Freeman at a hearing that he put his own interests above "those of people who are dying" when he sought to make the division of fees an issue just before the preliminary settlement in January of a case against Horizon Blue Cross Blue Shield of New Jersey. . . . Then she scolded Mazie for denying the accusation. . . . The exchange took place near the end of an unusual hearing in which Hochberg gave Mazie and opponent Bruce Nagel, of Nagel Rice in Roseland, an opportunity to testify under oath and cross examine each other in the fee dispute that continues months after the underlying case settled. . . . It was like an exasperated parent ordering two children claiming the largest dish of ice cream to duke it out in backyard. In this case, Hochberg jumped into the fray and gave Mazie a few verbal shots to the head before dismissing both lawyers with a warning not to add their time at the hearing to their bills. . . . "Nothing in this discussion gets charged, that's for sure," she declared.

NEW YORK  

BigLaw Firm Sues Manhattan Celebrity
Watering Hole Over Unpaid Bills

By Nate Raymond | New York Law Journal | New York Lawyer

10-9-09 -- Baker & Hostetler has taken the owner of a New York bar frequented by celebrities to court seeking more than $307,000 in unpaid legal bills. The law firm last week sued former client Little Rest Twelve Inc. in Manhattan Supreme Court for failing to pay for work Baker & Hostetler did in the spring to fight off an injunction blocking the use of the name "Buddha Bar" at a restaurant it operates in the Meatpacking District. Little Rest in March fired Baker & Hostetler over its fees, with five partners billing at $475 to $950 an hour. ***** The fee suit is Baker Hostetler LLP v. Little Rest Twelve Inc., 650583/2009. The trademark suit is George V Restauration S.A. v. Little Rest Twelve Inc., 602309/2007. —

NEW YORK  

$586 Million Settlement Approved in IPO Case

Mark Hamblett, New York Law Journal

10-8-09 -- Southern District of New York Judge Shira A. Scheindlin gave her final approval Wednesday to an April settlement concluding eight years of litigation over inflated pricing and undisclosed compensation in initial public offerings during the technology boom. . . . The settlement, which involves a total of $586 million to end 309 coordinated class actions brought against investment banks and the companies they took public, was deemed fair by the judge. She also awarded Stanley Bernstein of Bernstein Liebhard and other plaintiffs lawyers one-third of the $510 million net settlement fund, or $170 million, in fees.

CALIFORNIA  

Court Tosses $400,000 Attorney Fee Award as Arbitrary

By a MetNews Staff Writer

10-7-09 -- The Sixth District Court of Appeal yesterday ordered reconsideration of an attorney fee and cost award representing less than one third of the $1.3 million requested by a San Jose lawyer and his wife in their action against their former general contractor. . . . In a 71-page ruling by Presiding Justice Conrad L. Rushing, the appellate panel said it could not determine that the award by Santa Clara Superior Court Judge William J. Elfving was adequate. While a trial judge does not need to explain his or her decision on a motion for attorney fees and costs, the justice emphasized, the award “must be able to be rationalized to be affirmed on appeal.” . . . As Rushing said he was “unable to surmise any mathematical or logical explanation” for the judge’s award to John Gorman and Jennifer Cheng, the panel reversed. . . . Gorman is the chief executive officer, chief financial officer, president, and secretary of Gorman & Miller PC, a small business law firm with offices in San Jose and Santa Monica. . . . He and his wife contracted with the Tassajara Development Corporation in 1999 to build them a $1.5 million  house in Los Altos Hills. . . . After the couple took occupancy of the home, Gorman and his firm filed suit on behalf of himself and his wife alleging defective construction. . . . Nearly three years later, Gorman and his wife entered into a global settlement with Tassajara and several other defendants. The settlement agreement provided that Gorman and his wife were to be deemed prevailing parties in the action for the purpose of invoking their right to recover attorney fees and costs pursuant to the terms of the construction contract. . . . Gorman ultimately requested attorney fees of $1,350,538.83 and costs in excess of $266,561.96. Over half of the requested attorney fees were billed by Gorman personally. . . . After a contested hearing on their motion, which lasted less than an hour, Elfving issued a 27-word order awarding “reasonable attorneys’ fees of $416,581.37 and reasonable costs of $142,432.46.”

NEW YORK  

Graubard, Lawrence Estate Begin Trial on $42 Million in Legal Fees

Nate Raymond, New York Law Journal

10-7-09 -- The widow of a New York real estate tycoon was "spacey" and "not fully aware" when she agreed to a 40 percent contingency fee with her lawyers at Graubard Miller, an attorney for her estate argued Monday. . . . A lawyer for Graubard countered that Alice Lawrence was in full possession of her faculties and that she had suggested the fee arrangement for the skillful attorneys who represented her. . . . Lawyers for the estate of Lawrence and Graubard Miller made opening arguments during the first day of trial before Howard Levine, the retired New York Court of Appeals judge acting as referee in the dispute in Manhattan Surrogate's Court. Graubard Miller argues Lawrence's estate owes it $42 million for a $104.8 million settlement obtained less than five months after switching from hourly billing to a contingency fee arrangement.

KENTUCKY  

Lawyers billed library $210,000 during spending inquiries

By John Cheves - Kentucky.com 

10-5-09 -- Private lawyers billed the Lexington Public Library about $210,000 this year as it faced scrutiny over its spending from the Lexington Herald-Leader, city auditors and its own board of trustees. . . . The law firm Stites & Harbison charged the library to respond to the newspaper's Open Records Act requests, answer a reporter's questions, review documents taken by city auditors and interview the library's staff about spending, among other tasks, according to billing records. . . .In April, the Herald-Leader detailed more than $134,000 in spending by then-chief executive Kathleen Imhoff on travel, meals, gifts and other items over five years, with little oversight. Most of the library's $15 million annual budget comes from Fayette County property taxes.

NEW JERSEY  

Local Lawyer Wins $100 Million Verdict, But Doesn't Expect to Collect a Cent

By Henry Gottlieb | New Jersey Law Journal | New York Lawyer

10-5-09 -- Cherry Hill, N.J., lawyer Benjamin Folkman won a $100 million personal injury verdict Thursday, but he doesn't expect to collect a penny of it. . . . He convinced an Atlantic County jury to award the sum — plus $250,000 in punitive damages — in a suit against a convict who is serving a life sentence for two murders in January 2001. Brian Wakefield stabbed Richard Hazard to death in Hazard's home in Pleasantville, doused the body with gasoline, beat the family dog and killed Hazard's wife when she came home. His death sentence was commuted in 2007 after the state abolished capital punishment. . . . The Hazards' five children decided to proceed with a liability suit against Wakefield, even though they knew he had no assets.

NEW YORK  

Trial to Begin Over Alleged 'Unconscionable' $42 Million Contingency Fee

Nate Raymond, New York Law Journal

10-5-09 -- A trial over whether Graubard Miller is entitled to a $42 million contingency fee from the estate of the widow of a real estate tycoon is set to begin today in Manhattan. . . . The trial, before Howard Levine, the former New York Court of Appeals judge serving as referee for Acting Manhattan Surrogate Troy Webber, will be the latest phase of a four-year litigation between the firm and its former longtime client, Alice Lawrence. . . . Lawrence refused to pay Graubard attorneys what her estate called an "unconscionable" $42 million after the firm in 2005 won a $104.8 million settlement just four months after agreeing to switch to a contingency fee after two decades of billing hourly rates. . . . Lawrence died in February 2008. Levine last month said in a referee's report that evidence presented by both sides raised material questions as to the value of Graubard's services and whether medical problems suffered by Lawrence interfered with her ability to understand the agreement she was signing. (Read the referee's report (pdf).)

September 2009

GENERAL

Clients Sued by Firms for Fees Retaliate With Malpractice Suits
Jordana Mishory, Daily Business Review

9-30-09 -- Fort Lauderdale, Fla., law firm Rothstein Rosenfeldt Adler says it "dedicated numerous hours in the pursuit" of justice for an education services company in a series of multimillion-dollar lawsuits filed around the country that alleged fraud, racketeering, defamation and legal malpractice. . . . The client was Whitney Information Network, which invested in a Panamanian company that owns and operates a Costa Rican hotel resort. Whitney alleges fellow shareholders, lawyers and contractors worked to wrench away its ownership stake. It filed suits in New York and Florida federal courts and was sued in Maryland. . . . Nearly three years after the litigation started, Whitney and a subsidiary are facing another lawsuit -- over unpaid attorney fees. . . . Rothstein Rosenfeldt Adler asserts the Whitney companies failed to pay legal bills totaling more than $400,000.

TEXAS  

Contingent Fee Spurs Suits by Exonerated Man and His Former Lawyer

Mary Alice Robbins, Texas Lawyer

9-29-09 -- A Dallas County man exonerated in 2008 has sued his former lawyer alleging that the contingent-fee contract under which the lawyer seeks about $1 million of the more than $4 million the state is expected to pay the exoneree is "unconscionable." But the lawyer has fired back, filing a suit of his own. . . . On Sept. 17, exoneree Steven Phillips sued his former attorney Kevin Glasheen and the Lubbock, Texas, firm of Glasheen, Valles, Inderman & DeHoyos in the 95th District Court in Dallas. In his original petition in Phillips v. Glasheen, et al.,Phillips alleges that Glasheen and his firm performed no "meaningful legal services" for Phillips before he terminated them on Sept. 16. [See the petition (pdf).] . . . Randy Turner, Phillips' attorney and a partner in Turner & McKenzie in Hurst, Texas, says he is unaware of any legal services that Glasheen did for Phillips. . . . In his petition, Phillips asks the court to declare Glasheen's fee "unconscionable, and thus unenforceable."

GENERAL

Citigroup GC Has No Sympathy for Law Firms Seeking Premium Fees

By Debra Cassens Weiss, ABA Journal

9-28-09 -- The general counsel for Citigroup says his in-house legal department has been battered by the economic downturn, leaving him with little sympathy for law firm arguments for premium fees. . . . General counsel Michael Helfer, a panelist at an event sponsored by Bisnow, said Citigroup’s in-house legal department has shrunk by about 300 employees over the last few years, many of them felled by layoffs, according to the Washingtonian’s Capital Comment Blog. Compensation for the lawyers who are left has been cut by up to 60 percent. . . . In such an environment, “The amount of sympathy I have for the argument that $1,000 an hour is a reasonable rate ... is nil,” Helfer said, according to the blog account.

American Lawyer Student Edition Preview: Cutting Law School Debt

Posted by Matt Straquadine, The Am Law Daily  

9-28-09 -- The article below appears in the Fall 2009 issue of The American Lawyer Student Edition. The full issue will be available on September 29 at www.americanlawyerse.com. . . . The average law student who graduated from a private university in 2008 borrowed more than $91,500 on the way to earning that degree, according to the nonprofit Equal Justice Works. . . . Combine that with leftover undergraduate debt and the shrinking job market, and you've got a surefire recipe for postgrad financial fright. In a sharp departure from recent history--when students coming out of even mid-tier schools could count on commanding six-figure salaries upon graduating--law school debt is now a heavy burden.

OHIO  

State to slash lawyers' pay from crime-victims fund

Advocates fear difficulty getting legal help in abuse cases

By Holly Zachariah, The Columbus Dispatch

9-28-09 -- Victims' advocates and some attorneys say a reduction in the amount the state reimburses lawyers for work in abuse cases will make it more difficult for victims to get protection orders, especially in rural areas. . . . But Ohio Attorney General Richard Cordray says he had no choice but to rein in reimbursements from the state's rapidly dwindling Crime Victims Compensation Fund. . . . A civil protection order is often the first step in a suspected abuse case. A victim can ask a judge to take such action as removing an abuser from a home or establishing temporary custody. A court appearance almost always is required. . . . Until now, the state reimbursed lawyers at a rate of $150 an hour for court and for travel time for work representing victims in such cases. The state paid $1.32 million to lawyers in 2008, with nearly half of that money going to just five attorneys or law firms. . . . Beginning Oct. 1, that rate will be $60 an hour for court work and $30 an hour for travel, the same as attorneys have always received for helping crime victims fill out compensation claims for missed work, medical bills and other expenses stemming from crimes.

FLORIDA  

Judge issues ruling on legal fees in Venice Sunshine case

By Kim Hackett, Sarasota Herald-Tribune.

9-25-09 -- Ending 16 months of litigation, Circuit Judge Robert Bennett ruled that the city of Venice has to pay open government suit plaintiff Anthony Lorenzo's attorneys $750,000. . . . Bennett did not grant Lorenzo's attorneys a multiplier that could have raised legal fees past $2 million. He also did not grant about $200,000 in attorneys fees for the three months attorney Andrea Mogensen and her legal team prepared to fight about fees, saying there was no precedent. . . . The cost to taxpayers was about ten times more than what the city attorneys argued they should be and three times more than what the case could have settled for last fall. . . . Bennett rebuffed the city's arguments that Lorenzo's attorneys derailed a settlement and "churned" the case to drive up legal costs.

DISTRICT OF COLUMBIA  

D.C. Court of Appeals Details Rules for Escrowing Up-Front Legal Fee

By Martha Neil, ABA Journal

9-24-09 -- In one of the few decisions that addresses the proper handling of legal fees paid up front by the client before they are earned, the District of Columbia Court of Appeals held that they should be escrowed in the attorney's trust account—and explains the rules for doing so. . . . At issue in the attorney discipline case filed against D.C. solo practitioner Robert Mance III was a criminal defense matter he agreed to handle for a flat fee of $15,000, with an upfront payment of $7,500. A three-judge appellate panel held that Mance, who was not immediately able to return the money when the matter concluded before much work was done, should be censured, reports the Blog of Legal Times.

TEXAS  

Exonerated man fights $1 million payout to lawyer

By Mitch Mitchell, Fort Worth Star Telegram

9-23-09 -- A man freed from prison by DNA evidence has asked a judge to stop his former lawyer from taking more than $1 million in fees out of his expected $4 million in state compensation. . . . Lawyers for Steven C. Phillips, 51, filed a petition in state district court in Dallas asking the judge to declare an agreement with his former lawyer "unconscionable and thus unenforceable." . . . That contract with his former lawyer obligated Phillips to give up one-fourth of his award from the state for the 24 years he spent incarcerated for a string of sexual assaults the courts now say he did not commit. . . . "I’ve got kids and grandkids out here," Phillips told the Star-Telegram. "That’s what I’m fighting for now. I’ve seen a lot of unfairness in my life. If now I get a chance to stand up against some of that unfairness, well I’m going to." . . . Phillips’ previous attorney, Kevin Glasheen, said he and his firm worked on behalf of Phillips and nearly a dozen other exonerees to win increased payments from the state in exchange for a cut of the proceeds. He said his firm worked diligently to increase the payments by steering a new bill through the Legislature.

NEW YORK  

Judge Won't Budge on Attorney Fees in Modeling Agency Price-Fixing Settlement

Mark Hamblett, New York Law Journal

9-22-09 -- Southern District of New York Judge Harold Baer Jr. is not budging on his insistence that attorney's fees of 20 percent are high enough in the litigation over collusion in the modeling agency business. . . . Baer last week refused a request by lawyers for the models, who in 2004 won a hard-fought settlement with the Wilhelmina Model Agency and nine other agencies, to increase fees from the slightly more than $4.3 million already awarded. . . . He based his decision in part on the number of lawyer hours expended on "unnecessarily contentious litigation" by plaintiffs counsel, led by Paul Verkuil of Boies Schiller & Flexner. The firms had sought some 33 percent of the $21.8 million settlement in fees but got 20 percent, leaving more than $2 million for the judge to distribute to designated charities under the cy pres doctrine. . . . The suit brought by the models alleged widespread price-fixing in the industry, with agencies colluding on commission rates paid to models in violation of antitrust laws.

NEW YORK  

NY Judge Whips Out Fee Kryptonite on Supermodels' Lawyers

By Mark Hamblett | New York Law Journal | New York Lawyer

9-21-09 -- Southern District Judge Harold Baer Jr. is not budging on his insistence that attorney's fees of 20 percent are high enough in the litigation over collusion in the modeling agency business. . . . Judge Baer last week refused a request by lawyers for the models, who in 2004 won a hard-fought settlement with the Wilhelmina Model Agency and nine other agencies, to increase fees from the slightly more than $4.3 million already awarded. . . . He based his decision in part on the number of lawyer hours expended on "unnecessarily contentious litigation" by plaintiffs' counsel, led by Paul Verkuil of Boies Schiller & Flexner. The firms had sought some 33 percent of the $21.8 million settlement in fees but got 20 percent, leaving more than $2 million for the judge to distribute to designated charities under the cy pres doctrine. . . . The suit brought by the models alleged widespread price-fixing in the industry, with agencies colluding on commission rates paid to models in violation of antitrust laws.

Amici Request En Banc Review of Standards on Fee-Splitting

Noeleen G. Walder, New York Law Journal

9-18-09 -- Recent federal court decisions establish a "virtually insurmountable" standard for determining fees for out-of-district counsel that will "rob some civil rights plaintiffs of the only representation they can find," insists a broad coalition of 30 public interest organizations and private law firms. . . . An amicus brief filed Thursday on behalf of the group by the Brennan Center for Justice and Paul, Weiss, Rifkind, Wharton & Garrison asks the 2nd U.S. Circuit Court of Appeals for en banc consideration of the standard adopted in Lochren v. County of Suffolk, 08-2723-cv, and Simmons v. New York City Transit Authority, 575 F.3d 170 (2009). . . . In Lochren, the circuit concluded that to be compensated at their standard rates, out-of-district counsel must "persuasively establish that a reasonable client would have selected" them "because doing so would likely (not just possibly) produce a substantially better result" than a lawyer within the district.

FEDERAL COURTS

Court Upholds $150 Million Settlement in Insurer Price-Fixing Class Action

Henry Gottlieb, New Jersey Law Journal

9-15-09 -- A federal appeals court has affirmed settlements worth $150 million, plus $29.9 million in legal fees and costs, in class action cases alleging that Zurich Financial Services and insurance broker Arthur J. Gallagher & Co. engaged in price fixing from 1994 to 2005. . . . The 3rd U.S. Circuit Court of Appeals ruled last week that the settlements reached in 2006 with customers and 10 state attorneys general were fair and reasonable and that the firms who represented the plaintiffs deserved the fees. . . . More than 50 plaintiffs firms were involved in the case, led by Cafferty Faucher in Philadelphia and Whatley, Drake & Kallas in New York. . . . The suits, consolidated in federal court in Trenton, N.J., were the outgrowth of investigations that showed in 2004 that insurance brokerages -- particularly industry leader Marsh & McLennan -- that were ostensibly trying to get the best deals for customers of property and casualty insurance colluded with insurers to divide the business and fix prices at artificially high levels.

WEST VIRGINIA   

Excessive: Trustee lawyer fees

Charleston Gazette Editorial

9-13-09 -- Before the 1980s, certain West Virginia lawyers with courthouse political connections were appointed "commissioners of accounts," which enabled them to take large fees from estates of the dead. Supposedly, they earned the lucrative shares from family inheritances by examining court filings of the estates -- but often the task was mere rubber-stamp approval. . . . This newspaper's late publisher, W.E. "Ned" Chilton III, waged a long crusade against this "ghoul system" of profiting from deceased people. Again and again, he wrote fiery editorials attacking it, and sent reporters to courthouses to gather estate records. Finally, the Legislature changed state law, allowing county probate clerks to receive and approve estate filings. . . . Now, a new lawsuit raises speculation that the same sort of reform might be needed for managers of trusts left for disabled children. Statehouse columnist Phil Kabler reported this case:

TEXAS  

Judge reduces lawyer bill to $20M in Stanford case

Associated Press, Dallas Morning News

9-11-09 -- The attorneys trying to track down billions of dollars the government said went missing in a massive Ponzi scheme allegedly run by Texas businessman R. Allen Stanford will get paid at least $20 million for three months of work, a federal judge ruled Thursday. . . . That's about $7 million less than what court-appointed receiver Ralph Janvey had requested for his law firm and the team of attorneys and consultants he hired. . . . Judge David C. Godbey rejected about $2.1 million in fees and expenses for some accountants and consultants Janvey hired. He also held back 20 percent of Janvey's bill and said he would consider releasing that money later.

FEDERAL COURTS

Court Upholds $150M Settlement in Insurer Price-Fixing Class Action

Henry Gottlieb, New Jersey Law Journal

9-10-09 --A federal appeals court has affirmed settlements worth $150 million, plus $29.9 million in legal fees and costs, in class action cases alleging that Zurich Financial Services and insurance broker Arthur J. Gallagher & Co. engaged in price fixing from 1994 to 2005. . . . The 3rd U.S. Circuit Court of Appeals ruled Tuesday that the settlements reached in 2006 with customers and 10 state attorneys general were fair and reasonable and that the firms who represented the plaintiffs deserved the fees. . . . More than 50 plaintiffs firms were involved in the case, led by Cafferty Faucher in Philadelphia and Whatley, Drake & Kallas in New York.

NEW YORK  

Attorneys Fight Plaintiffs Counsel's $195 Million Fee Request

Mark Hamblett, New York Law Journal

9-9-09 -- Objections have been filed to the $195 million fee request by plaintiffs attorneys who achieved a $586 million settlement in a massive federal initial public offering litigation. In papers filed Tuesday by counsel for objectors, four attorneys argue the request for $195 million was "outrageous" and "a fee of 33.33 percent is not permissible in a mega-fund case like this." . . . Southern District of New York Judge Shira A. Scheindlin is scheduled to hold a hearing Thursday to give final approval to the settlement and pass judgment on the fee request by Bernstein Liebhard, Milberg LLP and other plaintiffs firms.

MINNESOTA   

Judge Hits ‘Remora’ Lawyers, ‘Emphatically’ Turns Down Fee Request

By Debra Cassens Weiss, ABA Journal

9-8-09 -- A federal judge in Minneapolis didn’t hide his disdain when he turned down a request for $225,000 in attorney fees by lawyers representing objectors in a class action settlement. . . . The lawyers had argued against payment of $110 million in attorney fees as part of a settlement in shareholder litigation against UnitedHealth Group. U.S. District Judge James Rosenbaum lopped off some $42 million in attorney fees for class counsel, but said the objectors’ lawyers had nothing to do with his decision, the Wall Street Journal Law Blog reports. . . . “The remoras are loose again,” Rosenbaum wrote, referring to a type of suckerfish that attaches to other marine animals. The motion by objectors’ counsel—Edward Siegel, Edward Cochran, Stuart Yoes, and Scott Browne—“is emphatically denied,” he wrote.

TEXAS  

Lawyer in Stanford Case Defends $27 Million Fee Request

Jeff Carlton, The Associated Press

9-3-09 -- The lawyer trying to unravel what the government calls a multibillion-dollar Ponzi scheme run by Texas businessman R. Allen Stanford fired back at critics who said his request for $27 million in fees is excessive. . . . Court-appointed receiver Ralph Janvey escalated the rhetoric in his unusual public battle over attorney fees with the Securities and Exchange Commission in court papers filed Tuesday evening. . . . Janvey's attorneys argue that the fees are necessary because the Stanford case is far-flung and complex, "yet those who oppose payment to the Receiver claim to be shocked that a big clean up produces a big bill." . . . Janvey also referred to the SEC criticisms as "shrill objections" and suggested the agency either pays "very limited attention to what the Receiver does on a day to day basis, or they have a limited understanding of what a Receiver must do when faced with a task as daunting as gaining control of the Stanford entities and their assets."

NEW YORK  

Public Defender Loses Compensation Claim

Courthouse News Service

9-2-09 -- A New York public defender lost his lawsuit accusing New York City, judges and staff attorneys of violating his due-process rights by slashing his pay for serving as court-appointed counsel. . . .From 2000 to 2005, David Bliven served on a court-appointed panel, principally in the New York Family Court in Queens County. He was paid $75 an hour for offenses above misdemeanors, capped at $4,400 plus "reasonable" out-of-court hours and expenses. A trial judge fixed his compensation and reimbursement in a given case, and an administrative judge could review that decision for abuse of discretion. . . . In 2005, Bliven filed suit against Judges Barbara Salinitro, John Hunt, Guy DePhillips and Joseph Lauria, and staff attorneys Douglas Foreman, Julie Stanton and Cheryl Joseph-Cherry. . . . He said they conspired to reduce his requested pay in retaliation for his having made unpopular motions in about 15 child protective and foster care cases in 2001. . . . Between March and September 2002, he said, "nearly every voucher [he] submitted for public defender compensation ... to Judges Hunt or Salinitro were (sic) reduced by $50 - $150, all with no oral or written explanation as to why the voucher was reduced."

GEORGIA  

In $2.9 Million 'Blast Fax' Settlement, Plaintiffs Get Coupons and Lawyers Get Cash

Greg Land, Fulton County Daily Report

9-1-09 -- Business service and supply giant Pitney Bowes has agreed to settle a "blast fax" class action by giving $26 coupons to plaintiffs for each week they received an unwanted fax -- and $950,000 to the lawyers for the class. . . . The $2.9 million settlement ends a case originally filed in Cobb County, Ga., before being transferred to federal court. It began with Pitney Bowes' 2007 purchase of the corporate assets of Laser Life, a Marietta, Ga.-based supplier of toner and other printer products, according to court filings. . . . Among those assets was Laser Life's client list, which included more than 3,000 fax-machine numbers the company used to advertise its products. When Pitney Bowes assumed the operation, it began sending out promotional advertisements for its products to those numbers, according to the original complaint.

TEXAS  

Class Action Settlement Sparks Fight Over Legal Fees

Mary Alice Robbins, Texas Lawyer

9-1-09 -- The class action suit against Pedernales Electric Cooperative Inc. is over, but a fee fight rages on. On one side are two lawyers who represented class members and received a portion of $4 million in attorney fees. On the other side is an attorney who claims he didn't get a share of those fees as promised. . . . It's an unusual fee dispute that has been fought in courts in Texas' Harris and Travis counties. The lawyer for a party who objected to the class settlement sued class counsel Bill Ikard, Ikard Wynne, Baker & McKenzie and Baker & McKenzie principal Kerry Blair in Houston, but class counsel say the dispute belongs in Austin. On Thursday, a court in Austin will decide which court will hear the dispute. . . . Corpus Christi attorney Christopher Bandas filed Bandas Law Firm, et al. v. Ikard, et al. on March 26 in Houston's 280th District Court. Bandas alleges that he and his firm are owed $200,000 of the $4 million that 250th District Judge John Dietz awarded last year in Worrall, et al. v. Pedernales Electric Cooperative Inc., et al., the suit that members of the cooperative brought against the PEC and others.

August 2009

ARIZONA  

BigLaw Bunch Bag $100 Million in Bankruptcy Billings

By Brian Baxter | The American Lawyer | New York Lawyer

8-31-09 -- As Tucson, Ariz.-based mining company Asarco nears the end of its four-year bankruptcy odyssey, lead debtors counsel Baker Botts submitted its 12th application for fees on Friday. . . . The filing put the firm past the $100 million mark in billable hours since Asarco filed for bankruptcy in August 2005 after getting hit with a series of asbestos and environmental pollution suits. . . . It pales in comparison to the $100 million in fees that Weil, Gotshal & Manges has racked up in just a year's worth of bankruptcy work for Lehman Brothers, but Baker Botts may have more work ahead.

WEST VIRGINIA    

Group questions attorney fees for Eli Lilly settlement

Nearly one-third of $22.5 million payout went to private lawyers

by Michelle Saxton, Daily Mail Capitol Reporter

8-28-09 -- Private attorneys fees make up about a third of $22.5 million in total payments drug manufacturer Eli Lilly & Co. agreed to pay in a recent settlement with the West Virginia Attorney General's Office. . . . A state watchdog group has criticized the agency for a "lack of accountability" on how those fees are split and what services they cover. . . . The attorney general's office argues the focal point of the settlement should be the $14.75 million the state was awarded to help fund behavioral health services. Another $1 million will help with consumer protection services in the state. . . . Settlement information was released last week regarding a complaint Attorney General Darrell McGraw's office filed against Eli Lilly over how the company marketed the drug Zyprexa.

GENERAL

Two Veteran Lawyers Say Now Is the Time for Fixed Fees

Ben W. Heineman Jr. and William F. Lee, Corporate Counsel

8-24-09 -- In these troubled economic times, fixed fees for particular legal matters have appeal both for law firms and their corporate clients. We -- a former general counsel of a major company and a current co-managing partner of a major firm -- strongly believe that this is an idea whose time has come. For in-house counsel facing tremendous budgetary pressures, the fixed fee addresses the problems caused by the hourly rate, such as unpredictability, high costs divorced from actual value and, most importantly, the maddening law firm definition of "productivity" -- defined as more lawyers and more hours per matter. . . . For law firms facing reduced demand and cash flow problems (if not crises), the fixed fee addresses the issues of increasing overhead devoted to the billing process, clients flyspecking bills and demanding after-the-fact discounts, and delays in payments and falling realization rates.

'Billable Hour' Under Attack

In Recession, Companies Push Law Firms for Flat-Fee Contracts

By Nathan Koppel and Ashby Jones, Wall Street Journal

8-24-09 -- With the recession crimping legal budgets, some big companies are fighting back against law firms' longstanding practice of billing them by the hour. . . . The companies are ditching the hourly structure -- which critics complain offers law firms an incentive to rack up bigger bills -- in favor of flat-fee contracts. One survey found an increase of more than 50% this year in corporate spending on alternatives to the traditional hourly-fee model. . . . The shift could further squeeze earnings at top law firms. The past 18 months have been brutal for some big law firms as work that hinges on vibrant credit markets, such as deal making, has flat-lined. . . . Pfizer Inc., which spends more than $500 million a year on legal matters, says it expects to reduce its domestic law-firm spending by 15% to 20%, largely through flat-fee arrangements. It will pay 16 law firms lump sums to handle various portfolios of work, such as litigation and tax matters. "I have told firms you cannot make your historical profit margins" on Pfizer work, said the pharmaceutical giant's general counsel, Amy Schulman.

NEW YORK  

Civil Rights Defendants Going After Attorney Fees

Dan Levine, The Recorder

8-24-09 -- After copious litigation, plaintiffs challenging San Francisco Bay Area transit policies as racist were beaten at a bench trial earlier this year. . . . Then, in a move that struck some plaintiffs lawyers as uncommonly aggressive, the Metropolitan Transportation Commission asked Magistrate Judge Elizabeth Laporte to award up to $1.5 million in attorney fees. . . . Victorious plaintiff lawyers routinely seek statutory fees in class actions and other civil rights litigation, but defense attempts are much less numerous. Yet a small cluster of defense moves like the one before Laporte has lawyers like Brad Seligman of the Impact Fund worried. . . . "You get one award like this, a $1 million award, or even a $100,000 award, and you're telling any of these nonprofit or civil rights organizations you've got to be crazy to bring these cases," Seligman said.

CONNECTICUT  

When It Comes To Fees, What’s Reasonable?

By Norm Pattis, Connecticut Law Tribune

8-17-09 -- Little by little, we are creeping toward the regulation of legal fees. Whether this is a good thing or not depends, I suppose, on whether you are just starting out in the law and scrambling for your next client, or whether you are tap-dancing on the threshold of retirement, hoping to salt away enough to keep you until the Reaper calls.

Apparently, fees for lawyers’ services were set in colonial times. Before John Marshall became chief justice of the United States, he worked as a lawyer, handling matters for his clients. There was a fee card set in Richmond, Va. One biographer relates that Marshall would represent as many as 300 clients a year to generate the income he wanted. A lawyer handling as many clients a year today would undoubtedly face discipline; how could you adequately communicate with each? . . . The other day, my phone rang. It was a high-profile sort of guy who wanted to vent about his lawyer. Counsel had been paid; there was no trial, but a guilty plea. Yet more than $100,000 in fees were demanded, and the bills just kept on coming. I listened. Not much I could say.

PENNSYLVANIA  

Pa. lawyer paid $20 a month to represent abused

By Ronnie Polaneczky, Philadelphia Daily News

8-16-09 -- In July, 1,500 frantic state workers rallied in Harrisburg to protest the state's budget impasse, which resulted in them receiving only partial paychecks. . . . Neil Krum understands workers' terror, because he's living it. He's a lawyer who makes his living as a court-appointed attorney representing children in Philadelphia's Family Court. It's been three months since the city cut him a check for the important work he does for a revolving caseload of about 100 clients. . . . And that check—for a skimpy $60—is a fraction of the $10,000-to-$15,000 he says the city owes him for representing poor kids who've been abused or neglected.

TEXAS  

Land attorney: Don Hill's associate charged $1,500 an hour for consulting

By Jason Trahan / The Dallas Morning News 

8-6-09 -- An associate of former Dallas Mayor Pro Tem Don Hill, who is accused of directing a bribery and extortion scheme at City Hall, was charging a developer $1,500 an hour for his consulting services, according to testimony in the public corruption trial Wednesday. . . . "I almost fell off my chair when I heard," said Suzan Kedron, a land use attorney, recalling her reaction when she found out what defendant Darren Reagan was asking her former client, developer James R. "Bill" Fisher, to pay for help in getting zoning cases passed. . . . Kedron testified she knew of no consultants around town with those rates, particularly for zoning cases. . . . She and her law partner, who also handles zoning cases, bill just under $300 and $600 an hour respectively, she testified. Reagan, who is not a lawyer, was the head of the Black State Employees Association of Texas, which prosecutors say was a sham organization with no real members.

GE Pays $50 Million to SEC, $200 Million to Lawyers and Accountants

Ross Todd, The American Lawyer

8-5-09 -- It only took seven years, but on Tuesday the SEC finally took General Electric Co. to task for reporting materially false results in financial statements in 2002 and 2003. The company agreed to pay $50 million to settle SEC allegations that it misled investors, but GE did not admit or deny wrongdoing. The company wrote a much bigger check to the lawyers and accountants who investigated the alleged wrongdoing: roughly $200 million, according to a GE statement. . . . The SEC's complaint, filed Tuesday in Connecticut federal court, alleges that on four occasions GE officials approved accounting that was not in compliance with generally accepted accounting principals, including one instance where improper accounting allowed the company to maintain a nearly decade-long string of meeting or beating analysts' expectations for earnings per share. "When a company makes misleading public statements, the SEC will hold that company accountable," said David Bergers, the regional director of the SEC's Boston office, in an interview with the Am Law Litigation Daily. . . . A consent decree filed with the court Tuesday by GE was not immediately available on PACER.

FEDERAL COURTS

2nd Circuit Sets Tough Fee Standard

Daniel Wise, New York Law Journal

8-4-09 -- Manhattan lawyers who cross the East River to litigate civil rights cases in Brooklyn may have to accept lower fees under a federal appellate decision Monday. . . . A panel of the 2nd U.S. Circuit Court of Appeals in Simmons v. New York City Transit Authority, 08-4079, lowered a Manhattan-based attorney's fee by 21 percent, saying that Southern District rates did not apply to the case heard in the Eastern District. . . . The opinion written by Judge John M. Walker Jr. creates a presumption in favor of using the customary rates in the district where a case is litigated. To overcome that presumption, an attorney must show a likelihood that use of a lawyer from within the district would have produced a "substantially inferior result." . . . A rule incorporating "objective," "experienced-based" factors is needed, Walker wrote, to encourage "litigants to litigate with their own pocketbooks in mind, instead of their opponents."

July 2009

CALIFORNIA  

Appeals Court Grumbles at $4,700 Fee Fight

Evan Hill, The Recorder

7-31-09 -- Beverly Hills attorney David Karton just wants what he's owed. . . . But a dispute over fees with a former client, which earned an exasperated published opinion from California's 2nd District Court of Appeal on Thursday, doesn't seem any closer to a happy ending. . . . "Neither party should be rewarded for allowing this course of events to occur," wrote Justice H. Walter Croskey. . . . The dispute between Karton and Giuseppe Segreto began in February 2007, after Karton sent Segreto a final legal bill for $42,371. Segreto wanted the bill reduced, Karton said, and petitioned for arbitration. Later that year, the arbitrators denied Segreto's petition, awarding Karton his full bill. . . . But Karton also wanted interest -- about $4,700 that he said had accumulated between the February bill and the December award. . . . "I'm sure there will be people who say ... 'Karton's nuts,'" he said Thursday. "But I just feel ... if somebody's got a legitimate beef about the bill, it's one thing. I didn't feel this was legitimate."

PENNSYLVANIA  

Court-Appointed Attorneys File Emergency Motion to Demand Pay

Leo Strupczewski, The Legal Intelligencer

7-30-09 -- A group of nine court-appointed attorneys filed an emergency motion in federal court Friday, asking the judge overseeing their case against the city of Philadelphia and its common pleas court to order that they be paid. . . . According to the motion filed by West Chester, Pa.-based attorney Samuel C. Stretton, the attorneys have not been paid since "late April, early May." Stretton wrote in his accompanying memorandum of law that the city "apparently ... ran out of money before the end of the fiscal year ... and stopped making payments for bills being submitted during that time." . . . "Lawyers are being called by their landlords for eviction purposes and/or foreclosure," Stretton also wrote in the filing. "Some lawyers are having trouble paying health insurance or meeting medical needs or meeting basic needs. Even more importantly, the City of Philadelphia is not paying any vendors, i.e. experts, investigators, etc. As a result, all cases that are coming up for trial cannot be adequately prepared since the lawyers are not being paid and the personnel they need, i.e. experts, investigators, etc. are not being paid."

DISTRICT OF COLUMBIA  

From $500 Million DOJ Settlement, Only $211,000 Goes to Whistleblower's Lawyers

Lawyer says more qui tam suits are expected in the wake of increased federal spending

Ross Todd, The American Lawyer

7-24-09 -- When news broke Tuesday that the U.S. Department of Justice had entered into a whistleblower settlement with the state and city of New York worth more than $500 million, the Am Law Litigation Daily assumed some qui tam lawyer must be celebrating a whopper of a payday. But that doesn't appear to be so. . . . The federal government alleged that New York state and New York City had inappropriately sought Medicaid reimbursements for speech therapy, transportation and other services between 1990 and 2001. As a part of the settlement, the city will pay the federal government about $100 million and the state will pay about $332 million. The state will also drop about $108 million in pending Medicaid claims. (Here's the settlement agreement.)

GENERAL

Contract Lawyer Markups Turn Securities Suits into ATMs, Prof Says

By Debra Cassens Weiss, ABA Journal

7-24-09 -- A law professor says markups on work done by contract lawyers are turning securities class actions into ATM machines for the plaintiffs firms. . . . Lester Brickman, a professor at Yeshiva University’s Benjamin N. Cardozo law school, says the plaintiffs firms devote more lawyer time to coding and classifying discovery evidence than do the defense side law firms. In a commentary for Forbes magazine, Brickman asserts that contract lawyers hired by the plaintiffs firms wade through the material, “document by document.” . . . In the Tyco securities litigation, for example, out of more than 423,000 lawyer hours claimed by plaintiffs lawyers, 69 percent of it was for work done by contract lawyers reviewing 83.5 million documents. . . . Contract lawyers are paid only $35 to $40 an hour, but the time is billed at $300 an hour, according to Brickman. Some firms add a multiplier to the number, raising the hourly charge to $450 to $1,000 an hour.

CALIFORNIA  

Federal Judge Grants Attorney Fees in BAR/BRI Case but Slashes Amount

Amanda Bronstad, The National Law Journal

7-22-09 -- A federal judge in Los Angeles, ruling on an issue that had been remanded to his court by the 9th U.S. Circuit Court of Appeals, has granted attorney fees to two law firms that objected to the $49 million settlement in an antitrust class action against the publisher of the BAR/BRI bar examination review course. . . . However, U.S. District Judge Manuel Real of the Central District of California, who originally had denied fees to the objectors, granted significantly less than the attorneys had requested. He also refused to grant fees to several pro se objectors. . . . The 2007 settlement came in a case filed on behalf of 300,000 class members who claimed to have overpaid, on average, about $1,000 for BAR/BRI's bar review course because its parent company, West Publishing Corp., conspired to monopolize the market in a deal with Kaplan Inc., which sells preparatory courses for the Law School Aptitude Test.

NEW YORK  

Partner Fired for Not Meeting Billing Targets Sues Law Firm

Nate Raymond, New York Law Journal

7-22-09 -- A former corporate partner in the New York office of Edwards Angell Palmer & Dodge hired in the months before the credit crisis hit is suing the firm after it fired him for failing to meet revenue expectations. . . . Stephen R. Connoni, who joined the Boston-based firm in September 2007 but left only one year later, sued the firm in April in Manhattan Supreme Court for allegedly "unilaterally and improperly" firing him without a required vote of the partnership and without paying him all that he was owed. . . . The dispute between Connoni and Edwards Angell highlights the growing pressure on lateral hires in bad economic times to produce, said Marina Sirras, a New York recruiter who is also president of the National Association of Legal Search Consultants. . . . Firms are less and less likely to tolerate new recruits who do not carry through with bringing over business, she said. . . . "Firms are very conscious about the bottom line and what you can contribute to it," Sirras said. . . . Gina Carriuolo, a spokeswoman for Edwards Angell, said the firm does not comment on pending matters.

ILLINOIS  

Judge awards attorneys' fees, tinkers with costs in Spearman case

By Amelia Flood, St. Clair Record 

7-17-09 -- At the end of a hearing over disputed attorneys fees and costs in a 2002 personal injury suit, Madison County Circuit Judge Dennis Ruth said he was sure most of those gathered weren't happy. . . . "I understand you're not happy with your verdict," Ruth told plaintiff Walter Spearman. "The defense isn't happy either." . . . Spearman's attorney, Rodney Caffey of LakinChapman in Wood River, expressed his displeasure as well when Ruth knocked a little under $2,000 off his requested $13,800 in litigation costs. . . . Friday's hearing pitted Spearman against his attorneys over about $41,000 in legal fees and two attorneys' advance litigation costs -- $8,132 for Alton attorney J. Robert Edmonds and just under $14,000 for Wood River attorney Rodney Caffey. . . . LakinChapman had agreed to pay Edmonds' firm out of the $41,000 for their work on Spearman's case. . . . Spearman argued that Caffey's request for the $41,000 was exorbitant and that his work didn't merit that amount.

FEDERAL COURTS

5th Circuit Throws Out Scruggs' $70 Million Deal

Timothy R. Brown, The Associated Press

7-16-09 -- A federal appeals court has thrown out a $70 million settlement brokered by convicted former lawyer Richard "Dickie" Scruggs. . . . The settlement involved a dispute between the Republic of Venezuela and Northrop Grumman Ship Systems. . . . Scruggs, a chief architect of the multibillion-dollar tobacco settlements of the 1990s, is serving a seven-year prison sentence for conspiracy in one bribery case and mail fraud in another. . . . In a July 9 ruling, a three-member panel of the 5th U.S. Circuit Court of Appeals in New Orleans ruled that a district court in Mississippi erred when it declined Venezuela's appeal of the settlement Scruggs agreed to in 2005.

NEW JERSEY  

$7.6 Million Later, Tropicana Casino Fees Still Rolling In

Wayne Parry, The Associated Press, Law.com

7-15-09 -- As many gamblers know, things can get expensive in a hurry in Atlantic City. . . . The latest proof is the Tropicana Casino and Resort, where the 20-month effort to sell the business has racked up nearly $7.7 million in legal and consulting fees, with still more to come. . . . On Wednesday, the state Casino Control Commission will consider additional bills totaling nearly $50,000. . . . Those fees, some billed at $970 an hour, are paid by the casino. They represent more than nine full days' winnings for the Tropicana, which is struggling to regain market share while threatening to lay off employees because of economic pressures. . . . The Tropicana was sold last month for $200 million to a group of investors led by billionaire Carl Icahn; the deal could close by year's end. When the casino-hotel first went on the market over a year and a half ago, it was expected to fetch about $1 billion.

GENERAL

Madoff Trustee Seeks Interim Counsel Fees of $15 Million

Noeleen G. Walder, New York Law Journal

7-13-09 -- The trustee charged with liquidating the investment advisory firm of Bernard L. Madoff asked a bankruptcy judge on Friday to approve more than $15 million in interim counsel fees. . . . In the nearly seven months since Irving H. Picard was appointed trustee by the Securities Investor Protection Corp., he and his counsel have made significant progress in investigating Madoff's massive Ponzi scheme, according to Baker & Hostetler's initial application for attorney fees and expenses incurred from Dec. 15, 2008, through April 30, 2009. . . . The $14.7 million that the team of lawyers, paralegals and non-legal staff is requesting amounts to a 10 percent discount off their customary rates. . . . A second fee application filed Friday requested $759,000 for Picard, "of which 20 percent is to be deferred through the conclusion of the liquidation period," and a mere $45 for his expenses.

Closing arguments on the billable hour

By Chris Mondics, Philadelphia Inquirer Staff Writer

7-13-09 -- Evan Chesler, head of the old line New York law firm Cravath, Swaine & Moore L.L.P., caused jaws to drop in early January when he challenged lawyers to dispense with the hourly billing system that had sustained the industry for generations. . . . The system rewards inefficiency, frustrates clients and has little economic logic, he argued. . . . Chesler verbalized what many law-firm leaders had been silently mulling for years and triggered an enormous debate over the potential benefits of alternative billing arrangements, such as flat fees, or discounted rates linked with incentive payments for favorable results. . . . But to what degree has the industry actually changed the way it is charging clients? . . . So far, the answer appears to be not so much. . . . In the great majority of cases, the billable hour still reigns supreme. While many law firms have rushed to offer clients alternatives, the institutional obstacles to change remain daunting, say industry insiders. . . . Billable hours are a key measure of productivity and for determining compensation at most large law firms, as well as a measure of profitability of individual practice areas. Moreover, many of the lawyers who run the in-house legal departments of big companies, and who select their companies' outside law firms, are themselves graduates of those law firms and thus more comfortable with the billable hour than alternative rate structures.

GENERAL

Judge Approves Bluetooth Settlement, but Balks at Attorney Fees Award

Amanda Bronstad, The National Law Journal

7-10-09 -- A federal judge has approved a class action settlement involving claims that millions of owners of Motorola's Bluetooth headsets were not adequately warned of potential hearing loss from the devices. . . . However, the judge raised questions about a request for $800,000 in attorney fees, which recently were criticized by objectors to the settlement. . . . In February, U.S. District Court Judge Dale S. Fischer approved a preliminary settlement that provides no economic recoveries for plaintiffs but requires Motorola Inc., Plantronics Inc. and GN Netcom Inc. to pay $100,000 to four institutions related to hearing loss. Bluetooth Headset Products Liability Litigation, No. MDL-1822 (C.D. Calif.). The defendants are required to post additional warnings of potential hearing loss on their Web sites and in product manuals. An additional $12,000 would go to the representative plaintiffs.

$567 Million Attorney Fee Award in Fen-Phen Litigation Challenged

Shannon P. Duffy, The Legal Intelligencer

7-9-09 -- Two lawyers who are waging a challenge to the massive $567 million attorney fee award in the fen-phen diet-drug litigation faced a barrage of aggressive questions Wednesday in an hour-long argument before the 3rd U.S. Circuit Court of Appeals. . . . Attorney Brian S. Riepen of Dallas contends he was unfairly forced to contribute to the fee award from the fees he had earned through clients who opted out of the fen-phen settlement -- despite the fact that he never took advantage of the joint discovery conducted by the class action lawyers. . . . And attorney Raymond Valori of Weston, Fla., contends in a separate appeal that Chief U.S. District Judge Harvey Bartle III's rulings on the fee issues were seriously flawed because he failed to justify paying huge hourly rates to the lead lawyers for taking on a contingent case when, as Valori sees it, they faced little risk.

DISTRICT OF COLUMBIA  

Just How Much Do Lawyers in the White House Make?

David Ingram, The National Law Journal

7-6-09 -- Lawyers who work in the White House don't talk much, but they can't avoid having their salaries reported to Congress. . . . The Obama administration, complying with an annual congressional requirement, has released salary information for all those working in the White House, including more than 40 lawyers in the White House Counsel’s Office and other legal jobs. Click here for the full report and here (pdf) for a list with just legal staff. . . . White House Counsel Gregory Craig tops the list, naturally, at $172,200. By comparison, the former partner at Williams & Connolly made $1.7 million last year, according to a disclosure report released in April. . . . Below Craig, three people with the title of deputy White House counsel come in at $158,500: Daniel Meltzer, a longtime Harvard Law professor who is principal deputy; Cassandra Butts, a former vice president at the liberal Center for American Progress; and Mary DeRosa, deputy counsel for national security who previously worked on the Senate Judiciary Committee.

TEXAS  

Alternative Billing Increasingly Important for Texas Firms, Survey Shows
Jeanne Graham, Texas Lawyer

7-1-09 -- Each Wednesday at noon Texas time, all of the lawyers in Susman Godfrey's five offices are invited to dial in to vote yea or nay on proposed cases that require alternative -- nonhourly -- billing. . . . Kenneth S. Marks, a partner in the firm's Houston office, says he was ready to vote thumbs up for a defense case in which the client would pay a fixed fee and a negative contingent fee, which is like a bonus. "There's a specific claim made against the potential client for a specific amount, and if we are able to resolve it for less than that, we get a percentage of the savings," Marks says. . . . As it turns out, the case proposed by Bill Carmody, a partner in the firm's New York office, would have created a conflict of interest for the firm so it didn't take the case, says founding partner Stephen D. Susman. But the hybrid fee arrangement of a fixed fee plus a negative contingent fee is representative of the kind of flexibility firms can use in alternative billing, he says.

June 2009

GENERAL

Weil's AIG Fees Could Exceed $25 Million, Filing Shows

Nate Raymond, The American Lawyer

6-25-09 -- AIG has no doubt been a boon to the coffers of the law firms advising the company throughout its divesture efforts. But how big of a boon has never come to light -- until now. . . . In a filing in the General Motors bankruptcy Tuesday (pdf), Weil, Gotshal & Manges disclosed that 3 percent of its revenue during the last 12 months came from AIG. The firm revealed the fees in the process of disclosing possible conflicts of interest in the GM bankruptcy. . . . Exactly what dollar amount that equals is unclear. But back-of-the-envelope math suggests the fees are at least $25 million to $36 million, if not more. . . . Here's the math. Weil's filing says Lehman Brothers made up 6.6 percent of its revenue in the last year. Weil has already submitted a $55 million bill for its work on the Lehman case between September 15 to January 31. A little cross multiplication, then, would put its AIG fees easily in excess of $25 million.

What's the Damage? Lawyers Line Up for Payment in Chrysler Case

Brian Baxter, The American Lawyer

6-25-09 -- Jones Day, Schulte Roth & Zabel and Kramer Levin Naftalis & Frankel have submitted applications for nearly $19 million in attorneys' fees in the Chapter 11 case of the company formerly known as Chrysler. . . . As we reported last week, Chrysler's bankruptcy docket now has a new name: Old Carco LLC. The company was a profitable one in May -- for bankruptcy lawyers, at least. (Hourly billing rates are listed parenthetically as available.) . . . Chrysler's bankruptcy counsel at Jones Day, which submitted bills for $18.5 million last month, sought an additional $12.7 million in fees and expenses for work its lawyers did for the Auburn Hills, Mich.-based automaker between April 30 and May 31.

GENERAL

Kirkland Expands Use of Special Fee Structures

Firm is among a handful of large law firms making significant use of alternative-fee arrangements

Lynne Marek, The National Law Journal

6-15-09 -- In an effort to keep cash-strapped clients in the fold, Kirkland & Ellis is expanding its use of alternative-fee arrangements -- discounting rates and extracting promises of future work from corporate players. . . . During the past three years, the firm says it has given away more than $100 million worth of billable hours, but it hopes to make the revenue back through follow-up work from those clients. Reed Oslan, the Kirkland partner who is leading the firm's alternative-billing efforts, says that it hopes to expand the program. "It's been a mutually successful program for both the clients and the firm," Oslan said. . . . Though $100 million represents a very small percentage of the firm's fee income -- last year Kirkland grossed $1.4 billion, according to The American Lawyer -- the effort may be one of the most extensive at a major firm. Pamela Woldow, a consultant with Altman Weil who specializes in alternative-billing arrangements, said Kirkland is the largest firm by revenue or head count making the most of such arrangements.

Records Show $80 Million in Legal Fees for GM Bankruptcy

Brian Baxter, The American Lawyer

6-15-09 -- Weil, Gotshal & Manges, Jenner & Block and Honigman Miller Schwartz and Cohn have filed their applications for employment as counsel to General Motors in the troubled automaker's Chapter 11 case. The filings show that GM has paid more than $80 million in fees to the three firms over the past six months. . . . As lead bankruptcy counsel to GM, Weil has the lion's share of the billings at more than $54 million accrued in that period. That's roughly equivalent to the $55 million that Weil billed bankrupt Lehman Brothers between September 2008 and January 2009. . . . Weil bankruptcy partners Stephen Karotkin, Harvey Miller and Joseph Smolinsky appear on the filing. The firm states that partners advising GM will bill between $650 and $950 per hour with associates billing at hourly rates between $355 and $640. Weil was paid a $5.9 million retainer, part of which it intends to apply to "any outstanding amounts" that were "not processed through [Weil's] billing system" prior to the firm being retained as bankruptcy counsel.

NEW YORK

Why Does Fulbright & Jaworski Care So Much About $57,000?

Zach Lowe, The American Lawyer

6-11-09 -- Fulbright & Jaworski really wanted the $57,632.04 in legal fees they claimed an officer at a New York construction company owed them for litigation defense work. They wanted the money so badly, in fact, that they sued the man in state trial court last year, seeking the legal fees. . . . The defendant, Sal Carucci, did not roll over. He filed a motion to dismiss, saying he never personally retained Fulbright, and that the firm had no right to bill him for work they did for his company, Seasons Contracting Corp., according to court records and Carucci's lawyer. On Tuesday, the New York state Appellate Division, 1st Department sided with Carucci and dismissed Fulbright's suit. The dismissal reversed a lower court ruling that had allowed Fulbright to go forward with the case against Carucci. . . . The background: Fulbright billed Seasons "several hundred thousand dollars" total, and Seasons paid all of it save for that $57,000 and change, says Joseph Asselta, Carucci's lawyer and a name partner at the Long Island boutique Agovino & Asselta. So the firm, perhaps sensing Seasons would pay no more, went after Carucci in his capacity as a company officer, Asselta says.

NORTH CAROLINA  

Lawyer issued reprimand after fee dispute

By Ryan Jones, The Dispatch

6-10-09 -- A Lexington lawyer was reprimanded by the Grievance Committee of the N.C. State Bar for charging excessive and unnecessary fees while representing a client in a divorce and equitable distribution case. . . . According to the reprimand issued Feb. 12 and published in the most recent issue of the N.C. State Bar Journal, J. Calvin Cunningham, whose law office is at 18 S. Main St., and his client agreed to a 40 percent contingency fee on the equitable distribution matter and an hourly rate for the divorce matter, with the understanding that the client would not be able to pay her bill until she received a distribution. . . . The grievance committee found that throughout the representation Cunningham sent bills to his client for the divorce action that included a $50 charge for each time he reviewed the bill and another $50 charge for each time he sent a form letter to his client enclosing the bill. . . . Such excessive charges constitute dishonest task padding, the reprimand said, because reviewing the bill is an “obligation every lawyer owes to a client and is an overhead expense incidental to the practice of law.”

GEORGIA  

Lawyers move away from hourly billing

By Péralte C. Paul, The Atlanta Journal-Constitution

6-9-09 -- An old joke about attorneys’ billing rates goes like this: Did you hear about the new microwave lawyer? The punch line: You spend eight minutes in his office and get billed as if you’d been there eight hours. . . . While it draws a chuckle or two from those on the receiving end of bills for legal services, it’s no laughing matter for law firms. As the economy forces corporate clients to rein in costs, law firms are re-examining their dominant fee method: hourly billing. . . . Many of them have been looking at — and engaging in — alternative billing methods. Those include a fixed fee for a given project no matter how long it takes or a percentage of the value of a transaction. Other situations, such as a fine, might result in the firm receiving a percentage of the savings if it is successful in getting a reduction. In other cases, the firms and the clients agree to a combination of fee structures. . . . “Alternative billing can be good because there’s more thought and discussion on the front end,” said Jonathan Minnen, who chairs the corporate practice at Smith, Gambrell & Russell in Atlanta.

NEW JERSEY  

Lawyers for 'America's Most Wanted' Fugitive Can't Reverse Bail Forfeiture to Get Paid

Mary Pat Gallagher, New Jersey Law Journal

6-3-09 -- Two lawyers for a convicted child sex abuser who jumped bail were turned away on Monday in their novel attempt to have the bail forfeiture reversed in the interest of getting paid. . . . Though Edward Wronko and Thomas Pavlinic argued that allowing them to recoup their fees out of the bail funds served the desirable purpose of providing criminal defense counsel at private expense, the Appellate Division said the reason for bail would be undercut if the forfeiture were set aside. . . . Their client, Angel Parada, absconded between the jury charge and deliberations in January 2008, leading to his conviction on charges of sexually assaulting a 7-year-old girl from Maryland while she was visiting his family's home in North Plainfield, N.J.. His case was featured last March on "America's Most Wanted." He has been on the lam ever since.

May 2009

GENERAL

For Large Firms, Alternative Billing Makes Inroads

Gina Passarella, The Legal Intelligencer

Editor's note: This is the third part in a weekly series from The Legal Intelligencer examining the lasting effects of the current economy on the legal industry.

5-26-09 -- When Eli Lilly & Co. settled a whistleblower suit in January for $1.42 billion over allegations it improperly marketed an anti-psychotic drug, Duane Morris was in the unusual spot of representing the plaintiffs along with personal injury firm Sheller P.C. . . . While the clients may have been atypical for a large defense firm, Duane Morris has had plenty of experience working on contingency fee-based matters. . . . For at least the last decade, the firm has focused about 4 to 5 percent of its billable time on contingency fee or other matters with alternative billing structures. And throughout that time it has cultivated a process for assessing risk and potential rewards. . . . The firm will only take large commercial cases with a minimum fee of $1 million. There must be a 75 percent probability of success as determined by the firm's attorneys and contingent fee committee, and an opportunity to get three times the firm's recorded time.

ALASKA  

In Defense of the Billable Hour:
Bad, or Just Misunderstood?

Lower hourly charges don't necessarily translate into a lower bill for clients

Press Millen, The National Law Journal

5-18-09 -- Ask a lawyer what her hourly rate is and she'll probably give a dollar figure. Ask a client about his lawyer's hourly rate, and one may get a scowl. In fact, if one asks a client to describe his biggest complaint about his lawyer, one shouldn't be surprised if he says it's that hourly rate that is presumptively too high. . . . The imminent demise of the billable hour has been confidently predicted for years, maybe now more than ever. And yet, like Rasputin, no matter whether one tries to stab it, shoot it or poison it, the billable hour somehow manages to survive. The hourly rate -- at least until it finally dies -- is one of the knottiest aspects of the relationship between lawyers and their clients. The hourly rate problem can become a trap. . . . First, though, a cautionary tale: In 2005, the directors of Hewlett-Packard Co. were concerned about confidential board information leaking like a sieve to the news media. HP's "solution" to the problem was to hire private investigators who set about using a number of questionable techniques to investigate certain board members, employees and even reporters. When the dust cleared, HP's chairman had resigned, lawyers and others were indicted, a number of the principals were hauled before a congressional committee, the U.S. Securities and Exchange Commission investigated and the company paid a $14.5 million fine. . . . The real scandal, however, is that the plan was hatched with lawyers in the room.

Ted Stevens' Attorney Fees at Least $1 Million

Mike Scarcella, The National Law Journal

5-18-09 -- Nobody's ever said Ted Stevens' defense team would come cheap. Stevens paid his lawyers at Williams & Connolly between $1 million and $5 million, according to a financial disclosure report the former Alaska senator filed this month with the Senate Ethics Committee. . . . Williams & Connolly partner Brendan Sullivan Jr. won the Stevens case after a jury handed him a loss back in October. Several other partners, including Rob Cary, Alex Romaine and Craig Singer, were counsel of record in the case. At least several associates, including Beth Stewart, were part of the team. Click here to pull up a copy of Stevens' financial disclosure report.

ILLINOIS  

Blagojevich Lawyers Agree to $110-an-Hour Fee Limit

Mike Robinson, The Associated Press

5-11-09 -- Ousted Illinois Gov. Rod Blagojevich's lawyers have reluctantly agreed to be paid far below the rate some of them usually charge in return for being allowed to tap his $2.3 million campaign fund. . . . In court papers filed Friday morning, the lawyers accepted the rate of $110 an hour, which is the legal limit court-appointed lawyers can charge in federal cases. Big-name criminal defense attorneys often work on a flat-fee basis but when computed as hourly rates, their charges can range up to $700 and beyond. . . . The debate over fees between prosecutors and the Blagojevich defense team headed by attorney Sheldon Sorosky has been dominating developments in the case for weeks. . . . Blagojevich is charged with scheming to sell or trade President Obama's U.S. Senate seat and use the muscle of the Illinois governor's office to squeeze companies with state business for campaign contributions. He has pleaded not guilty.

CALIFORNIA  

Lawsuit Claims Chadbourne Overcharged for Computerized Legal Research

Attorney says law firms themselves pay flat fees for research services but then turn around and bill clients for those costs at hourly rates

Tresa Baldas, The National Law Journal

5-8-09 -- A California plaintiffs attorney has filed a lawsuit against a New York-based law firm on behalf of a former client of the firm for what she claims is a hidden but widespread practice within the legal profession: law firms secretly profiting off legal research fees by overcharging clients. . . . Consumer protection attorney Patricia Meyer filed a suit against New York's Chadbourne & Parke on March 2 for allegedly overcharging J. Virgil Waggoner, a Texas businessman, by several thousands of dollars for computerized legal research. His bill was roughly $20,000 for the research, she said, but it should have been closer to $5,000. Waggoner v. Chadbourne & Parke, No. BC408693 (Los Angeles Co., Calif., Super. Ct.). . . . She did not serve the firm until May 1 because, she said, she did not want to compromise other investigations alleging similar claims.

April 2009

CONNECTICUT  

Swedish Heiress Sues Proskauer for Overbilling in Case of Stolen Warhol

Zach Lowe, The American Lawyer

4-29-09 -- A Swedish heiress has sued Proskauer Rose for nearly $9 million, accusing the firm of manipulating its billing practices to overcharge her by millions. In a separate malpractice claim, she alleges that the firm mishandled her suit against the jet-setting art buyer who purchased an Andy Warhol silkscreen that had been stolen from her, court records show. . . . The heiress of a Swedish building fortune, Kerstin Lindholm of Greenwich, Conn., retained Proskauer in March 2002 to pursue claims against Peter Brant, the media mogul and Warhol enthusiast who purchased "Red Elvis" for $2.9 million in 2000 while it was on loan to the Solomon R. Guggenheim Museum, court records show. Brant bought the painting -- worth at least $12 million in 2003 -- from a crooked Swedish art dealer who sold it out from under Lindholm, according to court records and this New York Times story. The dealer eventually served prison time for the theft, but Lindholm never got the painting back.

FLORIDA  

Put cap on how much lawyers bill Florida

By Bill McCollum, Special to the Times, Tampabay.com

4-29-09 -- Accountability in government is what people deserve and should expect. This is why I am strongly advocating that the Transparency in Private Attorney Contracting legislation, which will secure good government principles for the Florida Attorney General's Office, become law. . . . As Floridians witnessed with the tobacco settlement, state government can go too far in hiring contingency-fee lawyers for what is ultimately tens of millions of dollars that instead should go to consumers. A contingency-fee legal contract may be needed when the state doesn't have the resources to pursue a complex lawsuit, but stripping our state of millions of dollars for private attorneys' profit must never happen again.

GENERAL

Though Unpaid, Petters Legal Team Must Stay on the Job, Says Judge

The Associated Press

4-13-09 -- A federal judge is telling businessman Tom Petters' criminal defense attorneys they can't quit -- even though they haven't been paid yet for any work they've done this year. . . . Petters' lawyers say because they haven't been paid, they've had to cut back on investigators, associate attorneys and expert witnesses as they prepare for Petters' trial, expected to begin this summer.

CALIFORNIA  

MoFo Accused of Charging ‘Staggering’ Attorney Fees

By Debra Cassens Weiss, ABA Journal

4-10-09 -- A suit filed by a former client claims Morrison & Foerster charged a staggering $4.8 million in attorney fees for its defense in a patent infringement suit, while failing to provide adequate representation. . . . The suit was filed by Ecast Inc., an Internet digital entertainment company, the Daily Journal reports (sub. req.). . . . Also named in the suit are two former MoFo lawyers who left the firm in 2007, Gerald Dodson and Erica Wilson. Ecast says the defendants failed to tell the company about cheaper legal strategies and did not uphold commitments on which lawyers would represent it in court.

GENERAL

Law Firms to Get $26 Million to Advise Treasury on Auto Industry Plan

Nate Raymond, The American Lawyer

4-9-09 -- The Treasury Department revealed Friday that it had awarded contracts to three law firms worth up to $25.8 million combined to advise on auto industry restructurings and on how to provide debtor-in-possession financing for troubled manufacturers and suppliers. . . . The contracts, awarded on March 30, went to Cadwalader Wickersham & Taft, Sonnenschein Nath & Rosenthal, and Haynes and Boone. The contracts each carry a ceiling value of $8.59 million. An administration official confirmed the three firms are "providing legal support for the restructuring effort." . . . Stephen Pezanosky, the Fort Worth-based chair of Haynes and Boone's bankruptcy and business restructuring practice, confirmed the firm received the six-month contract and that he would be one of the partners working with the government on "restructurings and potential bankruptcies."

NEW YORK  

2nd Circuit Scuttles Attorney Fees in Civil Rights Case

Mark Hamblett, New York Law Journal

4-3-09 -- Attorney fees should never have been awarded in a civil rights lawsuit brought by students who challenged their punishment for walking out of a Yonkers high school in a protest, a federal appeals court ruled Wednesday. . . . The 2nd U.S. Circuit Court of Appeals concluded that a lower court judge was wrong to award fees because the judge never granted relief in the case and therefore should not have found the students were "prevailing parties" within the meaning of a civil rights statute. . . . Judges Roger J. Miner, Sonia Sotomayor and Robert A. Katzmann decided the appeal in Garcia v. Yonkers School District, 07-3167-cv. Judge Miner wrote for the panel. . . . Students walked out of the Gorton High School on Sept. 10, 2004, and headed straight for Yonkers City Hall to protest a $26 million reduction in the school budget.

FLORIDA  

Judge Orders Lawyers to Give Up Attorney Fees

Billy Shields, Daily Business Review

4-2-09 -- Retired Miami cruise ship injury lawyer Jerrold Wingate and former associate Peter Sotolongo have been ordered to return almost $450,000 in fees collected under a secret deal after Wingate withdrew from dozens of personal injury cases amid bribery allegations. . . . Miami-Dade Circuit Judge Herbert Stettin, who supervised Wingate's complex withdrawal, became aware of the agreement in January and held a contempt hearing. . . . The fee-splitting arrangement involved Wingate, Sotolongo and fellow Miami admiralty lawyer Brett Rivkind of Rivkind Pedraza & Margulies dividing the proceeds from 77 crew injury cases brought against Royal Caribbean Cruise Lines. . . . The origins of the secret fee arrangements stem from Royal Caribbean alleging in January 2008 that Wingate employees were paying off cruise line investigators in exchange for inside information about confidential settlement terms that were being considered by the company's lawyers. In the wake of that accusation, Wingate walked away from his case portfolio before Stettin could rule to disqualify him.

Turn Your Head and Cough Up $450,000:
Lawyers in Bribery Mess Lose Fees

New York Lawyer, By Billy Shields, Daily Business Review

4-2-09 -- Retired Miami cruise ship injury lawyer Jerrold Wingate and former associate Peter Sotolongo have been ordered to return almost $450,000 in fees collected under a secret deal after Wingate withdrew from dozens of personal injury cases amid bribery allegations. . . . Miami-Dade Circuit Judge Herbert Stettin, who supervised Wingate's complex withdrawal, became aware of the agreement in January and held a contempt hearing. . . . The fee-splitting arrangement involved Wingate, Sotolongo and fellow Miami admiralty lawyer Brett Rivkind of Rivkind Pedraza & Margulies dividing the proceeds from 77 crew injury cases brought against Royal Caribbean Cruise Lines. . . . The origins of the secret fee arrangements stem from Royal Caribbean alleging in January 2008 that Wingate employees were paying off cruise line investigators in exchange for inside information about confidential settlement terms that were being considered by the company's lawyers. In the wake of that accusation, Wingate walked away from his case portfolio before Stettin could rule to disqualify him.

NEW JERSEY  

Giving New Meaning to Fee Fight, Client Says Award Is Owed Him, Not Lawyer

Mary Pat Gallagher, New Jersey Law Journal

4-2-09 -- A lawyer who prevailed in a Title VII suit three years ago has been engaged since then in an unusual fee fight: against her own client, who says his pro se work entitles him to keep the fees awarded. . . . Worse for the lawyer, Antonia Kousoulas, the client is asserting his right to the $144,462 in fees and interest -- now sitting in a court registry -- through a malpractice counterclaim that a federal judge on Monday refused to throw out. . . . The underlying suit, Kant v. Seton Hall University, 00-Civ.-5204, was filed pro se in October 2000 by Chander Kant, a tenured assistant professor of economics at Seton Hall University's Stillman School of Business. Kousoulas, who heads an eponymous New York firm, entered her appearance as Kant's lawyer the following March.

NEW YORK  

Wanting to Get Paid Is Malpractice?:
NY Lawyer In Fee Fight With Ex-Client Who Fired Her

New York Lawyer, By Mary Pat Gallagher, New Jersey Law Journal

4-2-09 -- A lawyer who prevailed in a Title VII suit three years ago has been engaged since then in an unusual fee fight: against her own client, who says his pro se work entitles him to keep the fees awarded. . . . Worse for the lawyer, Antonia Kousoulas, the client is asserting his right to the $144,462 in fees and interest -- now sitting in a court registry -- through a malpractice counterclaim that a federal judge on Monday refused to throw out. . . . The underlying suit, Kant v. Seton Hall University, 00-Civ.-5204, was filed pro se in October 2000 by Chander Kant, a tenured assistant professor of economics at Seton Hall University's Stillman School of Business. Kousoulas, who heads an eponymous New York firm, entered her appearance as Kant's lawyer the following March. . . . Kant, born in India, claimed national-origin discrimination in the school's failure on three occasions to promote him to full professor. He also alleged he was denied promotion in retaliation for complaining of discrimination. The discrimination claim was dismissed on summary judgment.

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March 2009

CALIFORNIA  

Attorneys Drop Fees in Shareholder Case Alleging Backdating

Revised deal in suit against Cirrus Logic is latest example of judge disputing fee terms

Amanda Bronstad, The National Law Journal

3-31-09 -- The plaintiffs lawyers in a shareholder derivative lawsuit involving allegations of stock-options backdating against Cirrus Logic Inc. have agreed, in a revised deal filed this month, to drop all attorney fees, which the judge in the case had described as "almost entirely unmerited." . . . The revised deal, which was approved on March 25, comes as judges in derivative actions involving the backdating of stock options have questioned the amount of attorney fees in cases involving noncash settlements. Last year, a federal judge in California initially rejected a settlement for similar reasons in a backdating case involving Zoran Corp. . . . "Judges are understandably concerned in these types of cases when the suit is brought on behalf of the company but, at the end of the day, there doesn't seem to be any tangible benefits flowing to the company, who is the client of the plaintiff's attorneys, and all the money seems to be flowing to the attorneys themselves," said Lawrence Gaydos, a partner at Haynes and Boone in Dallas, who represents one of the individual defendants in the Cirrus Logic case.

GENERAL

Billing out of the box

From flat rates to bartering, it's all on the table.

Sheri Qualters / Staff reporter

3-30-09 -- When it comes to billing, it's time to get creative. . . . Midsize and small firms, as well as solo practitioners in a wide range of practice areas, including patent law, animal law, business law and bankruptcy, are responding to the tanking economy by doing everything from adopting flat rates and packaging legal services to bartering their work in limited situations. . . . Some firms are also charging clients less for e-mail advice than telephone advice, or teaming with software companies to develop programs that generate low-cost pro se documents tailored to the client's situation. . . . This year, Thav, Gross, Steinway & Bennett, a Bingham Farms, Mich., business law and litigation and consumer bankruptcy firm, is basing fees for bankruptcy and related work on what the customer can afford, said shareholder David Einstandig. . . . "A reasonable fee is a fluid concept that depends upon the reality of a client's situation," Einstandig said.

NEW YORK  

Wage Gauge: NY Judge Nixes Bonus to Attorneys' Fees for Lawyers Who Just Did Their Job

New York Lawyer, By Daniel Wise, New York Law Journal

3-30-09 -- A legal organization funded for a specific mission should not be awarded an enhancement of its fees for bringing a winning lawsuit to promote that mission, a state judge has ruled. . . . Acting Supreme Court Justice Matthew F. Cooper of Manhattan nixed a request from the Urban Justice Center, a group that represents those unable to afford counsel, for a multiplier that would have significantly increased its lodestar fee, which was based on hours billed at a customary rate. . . . The center sought the boost in fees after winning a class action suit that forced New York City to abandon an increased fine schedule for infractions of city codes by street vendors.

DISTRICT OF COLUMBIA  

D.C. Lawyers Honored for Free Service to the Poor

By Del Quentin Wilber, Washington Post Staff Writer 

3-26-09 -- The tough economy didn't stop major D.C. law firms from providing free representation to the indigent last year. . . . At a breakfast ceremony this morning, D.C. federal judges honored 26 large law firms for providing such services to the poor in 2008. That is up from 21 such firms in 2007 and seven in 2004. More than 100 firms with offices in the District were eligible to be considered for the honor. . . . To receive recognition, a firm must have at least 25 lawyers and 40 percent of them must have provided at least 50 hours of free legal services, which is known as pro bono work. U.S. District Judge Rosemary M. Collyer coordinates the free legal work for the federal court. . . . David B. Sentelle, chief judge of the U.S. Court of Appeals for the D.C. Circuit, said providing free work in criminal and civil cases is an important "service to the community." . . . Being a lawyer is "more than how much money you make," he said.

GENERAL

Attorneys taking federal CJA cases get a fee bump

Marcia Coyle / Staff reporter

3-24-09 -- Attorneys who accept assignments under the federal Criminal Justice Act (CJA) will see their fees bumped up from $100 per hour to $110 per hour because of recently appropriated funds by Congress. . . . The CJA was enacted in 1964 to establish a comprehensive system for appointing and compensating lawyers to represent defendants financially unable to retain counsel in federal criminal proceedings. The CJA authorized reimbursement of reasonable out-of-pocket expenses and payment of expert and investigative services necessary for an adequate defense. While it provided for some compensation for appointed counsel (CJA panel attorneys), it did so at rates substantially below that which they would receive from their privately retained clients. . . . Federal defender organizations, together with the more than 10,000 private "panel attorneys" who accept CJA assignments annually, represent the vast majority of individuals who are prosecuted in the nation's federal courts, according to the Administrative Office of the U.S. Courts. CJA panel attorneys accept appointments in all CJA cases in the five districts not served by a federal defender organization. In those districts with a defender organization, panel attorneys are typically assigned between 25% and 40% of the CJA cases, generally those where a conflict of interest or some other factor precludes federal defender representation.

CALIFORNIA  

Fee Fight Yields $25,000 Sanction for Plaintiffs Lawyer

Dan Levine, The Recorder

3-24-09 -- A federal judge turned down a request for more than $2 million in fees and sanctioned a San Francisco plaintiffs lawyer $25,000 for submitting false fee applications in civil rights litigation against FedEx. . . . Judge Susan Illston also forbade attorney Waukeen McCoy from filing any more FedEx-related fee petitions in the future. McCoy forfeited that right because of his bad faith, Illston ruled Thursday. . . . "His acts of misconduct with regard to the fee petitions are among the most egregious that this court has seen in almost 14 years on the bench," Illston wrote. . . . McCoy quickly sought redress Friday with the 9th U.S. Circuit Court of Appeals. . . . "I am truly disappointed with the court's ruling," he told The Recorder. "However, as a civil rights attorney fighting many billion-dollar corporations and powerful conglomerates, attacks on my character are to be expected."

MINNESOTA   

Attorney fees under fire

by Michelle Lore Associate Editor

3-20-09 -- A bill that could limit the amount of attorney fees awarded in fee-shifting cases has riled plaintiffs’ attorneys. . . . The legislation, introduced earlier this month, would require that where a statute provides for the award of attorney fees to a successful litigant, judges must take into consideration the reasonableness of the fees sought in relation to the amount of damages awarded to the prevailing party. . . . The bill also contains a provision mandating that if a plaintiff claiming an award of attorney fees rejected a Rule 68 offer of judgment and failed to obtain a verdict in excess of the offer, the plaintiff will not get any fees after the date of the offer. . . . Opponents of the bill are concerned it will cause attorneys to refuse cases where the amount in dispute is minimal, like some landlord-tenant matters or debt collection cases.

TEXAS

Funding a child custody case:
Attorney’s fees are only part of it.

James Roark, Houston Family Law Examiner

3-19-09 – A hotly contested child custody case in Harris County is likely to rack up some hefty attorney’s fees.  No surprise there.  Not everyone has the ready funds to match an attorney’s retainer demands in such cases. . . . Often, waiting to save up for a retainer is not an option.  Either you have been served a petition and have a short time to respond, or you learn of a situation that requires fast legal action to assure the well-being of the child. You manage to pull it together from a variety of sources, at least enough to get things started. At least now you have some breathing room, right?  Maybe. . . . The first order of business is the hearing for temporary orders.  That is, giving the court a preliminary presentation of the facts so it can set some ground rules for the parties to abide by during the pendency of the case.  Witnesses testify, documents, pictures, and other exhibits are presented.  What follows is hypothetical, but not beyond the realm of possibilities. . . . The judge can’t decide and needs more facts.  An amicus attorney is appointed to represent the child.  Ideally, this attorney will interview you, the child, the other party, and visit the homes to compare living environments, and participate in all other aspects of the case.  
Cost: $1500 per side to start, and if it goes to trial, could be more than what you pay your own attorney.

GENERAL

Billable Rates Now Under Siege Due to Recession

Flexibility is crucial as firms and clients test different billing methods beyond the traditional discount

Michael Tierney, Fulton County Daily Report

3-17-09 -- When an East Coast law firm ignored a client's suggestion and announced a nearly double-digit percentage billable hour rate hike for this year, the customer shifted some of its business elsewhere. . . . "The client, this firm did not hear," says Michael Rynowecer of Wellesley, Mass.-based BTI Consulting Group, a supplier of client research to law firms. . . . Most firms are hearing, loud and clear, from clients seeking a little billable-hour love during these harsh economic times. For two decades, substantial rate boosts were an annual rite, placing clients in a grin-and-bear-it posture. . . . No longer. Industry observers say clients are requesting -- even demanding -- by letter, fax, e-mail and Ma Bell a smaller tab to smooth their ride through the recession. . . . "By and large, there is significant increased pressure from the clients," says Joe Altonji, vice president in the Chicago office of the professional services consulting firm Hildebrandt International, whose study released last September projected a slowdown in law firm spending. "Unlike past years, when you have seen across-the-board billable rate increases, that clearly didn't happen this year."

February 2009

Cap $1,000-an-Hour Lawyer Fees While You Are at It:
Ann Woolner

Commentary by Ann Woolner, Bloomberg

2-6-09 -- As you may have noticed, these aren’t especially happy times for those used to the good life or those who merely get by. . . . . New York’s Rainbow Room is shutting down after 74 years as the dining room of the glamorous and the rich. U.S. President Barack Obama calls Wall Street bonuses “shameful.” . . . . Uncle Sam passes out tourniquets to financial firms. Carmakers gasp for survival. Each week, another friend gets kicked off a payroll. . . . . Then there are the bankruptcy lawyers. For them, these are grand times. . . . . The business of going under is one of the few booming ones these days, and fees paid to those who guide sick or dead companies through bankruptcy are, too. . . . . Rates broke through the $1,000-an-hour barrier for the priciest bankruptcy legal advice, running up to $1,110 at Kirkland & Ellis LLP, based in Chicago. . . . . Circuit City’s recent liquidation sales disappointed bargain-seekers, but its bankruptcy could become a bonanza for its lawyers at Skadden, Arps, Slate, Meagher & Flom LLP. Their rates top out at $1,050 an hour. (Whether the firm actually charges that hasn’t been decided, said the lead lawyer on the bankruptcy, Gregg Galardi.)