|
Make your Easter Special
with Egg-celent Deal

A
Victims-of-Law Advertiser
|
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.
|
SAVE
THE CHILDREN

A Victims-of-Law
Associate |
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
|

A
Victims-of-Law Advertiser |
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.
|
 |
Help Support Victims-of-Law on the web by
purchasing from its Advertisers |
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) .
|

A
Victims-of-Law Advertiser |
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."
|
HELP KEEP
VICTIMS-OF-LAW ON THE WEB
SHOP OUR ADVERTISERS
OR
CONTRIBUTE NOW
|
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.
|
 
A
Victims-of-Law Advertiser |
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."
|

A
Victims-of-Law Advertiser |
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.
|
HELP KEEP
VICTIMS-OF-LAW ON THE WEB
SHOP OUR ADVERTISERS
OR CONTRIBUTE NOW
|
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).)
|
 |
|
A
Victims-of-Law Advertiser |
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.
|
 |
Help
Support Victims-of-Law on the web by
purchasing from
its Advertisers |
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.
|
Help
Support Victims-of-Law on the web by purchasing from
it's Advertisers |
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.
|
Understanding Attorney
Fees So You Can Keep Your Legal Costs Down
HALT—An Organization of
Americans for Legal Reform
Consumers spend billions of dollars each year on legal
fees. While some are satisfied customers who are
getting competent legal help at reasonable prices, many
others believe legal fees are way too high and would
rather leave a legal problem unresolved than pay for
services they cannot afford. As a legal consumer,
your best defense against paying more than you should is
to educate yourself about legal fees before signing on
the dotted line.
Lawyers usually charge for their services in one of
three ways—hourly rates, flat fees and contingency fees.
They can also charge a retainer or “down payment” on the
legal services you are purchasing. The type of fee
arrangement with your lawyer can have a huge impact on
the amount you’ll pay.
Hourly
fees are based on the number of hours a lawyer works on
your case. For example, if a lawyer charges $100
per hour, your total fees will be $100 multiplied by the
number of hours worked. Flat fees are typically
offered for routine legal matters that are largely
paperwork, like preparing a will or getting an
uncontested divorce. You are charged one specific
fee for all of the work done on your case, no matter how
long it takes. Finally, with contingency fees,
attorneys receive payment only if they win your case.
Lawyers traditionally take one-third of their client’s
winnings, though sometimes this figure can range from as
low as 20 percent to as much as 50 percent.
The
good news is that some lawyers and law firms are
answering the call for more affordable legal services by
using alternative billing practices, agreeing to coach
pro se (unrepresented) litigants, providing innovative
services through the Internet and offering task-specific
legal services instead of full representation.
To
learn more about lawyer fees and tips on how you can
lower your legal costs, download HALT’s new guide
Understanding Attorney Fees (pdf) at
www.halt.org, or write to HALT for a free copy at 1612 K
St. NW, Suite 510, Washington, DC 20006.
HALT—An Organization of
Americans for Legal Reform
1612 K
St NW Suite 510 / Washington, DC 20006
202-887-8255 /
www.halt.org
|
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.

Get your FREE Last Will & Testament from RocketLawyer.com!

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.)
|