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November 2010

GENERAL

Lehman Bankruptcy Tab Tops $1 Billion

By Liz Moyer  Wall Street Journal

11-22-10 -- Lawyers and other professionals presiding over the bankruptcy proceedings of Lehman Brothers Holdings Inc. have now taken in a collective $1 billion in fees. . . . They crossed the threshold in October, according to a monthly securities filing. Since the bankruptcy filing in September 2008, fees paid for professional services total $1.023 billion. The law firms, consultants and other advisers took in $40.6 million in fees during October alone. . . . Law firm Weil Gotshal & Manges, the lead bankruptcy counsel, had $8.8 million in fees and expenses in October and a total of $245.8 million in the proceedings.


MISSISSIPPI  

Fight over attorney fees delays payment to family

Jimmie E. Gates • Jackson Clarion Ledger 

11-20-10 -- Now the lawyers are suing the lawyers. . . . A fight over attorney fees is delaying payment of a multimillion-dollar settlement in a lawsuit over the 2001 accident that claimed the life of Brian Cole, a top New York Mets baseball prospect, who was a standout player at Meridian High School. . . . A Jasper County Circuit Court jury awarded Cole's family more than $131 million in the wrongful death lawsuit against Ford Motor Co. Cole's cousin, Ryan Cole, who was injured in the crash, was awarded $1.5 million. . . . The settlement amount is confidential, but is much less than the jury award, parties to the case have said. . . . Jackson lawyer Wayne Ferrell Jr. is suing Arkansas lawyer C. Tab Turner and others in Jasper County Chancery Court, seeking to force Turner to abide by a 2006 attorney-fee sharing agreement.


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GENERAL

FTC gets tougher on fees collected by firms, lawyers for mortgage relief

Client trust accounts will be necessary under new rule

|By Ellen Gabler, Chicago Tribune reporter  

11-19-10 -- Hoping to cut down on fraud and scams tied to the mortgage crisis, the Federal Trade Commission is tightening rules for companies and attorneys who perform loan-modification and foreclosure-rescue services. . . . On Friday the FTC announced a rule that would prevent mortgage-relief companies from collecting fees from consumers until a homeowner has a written offer from a lender and decides the offer is acceptable. . . . Loan-modification and rescue schemes have flourished as the financial and mortgage crisis squeezes consumers. Unscrupulous companies often collect fees from consumers, yet fail to do any work.


NEW JERSEY  

Judge Rebuffed for Denying Novartis Fees in Win of Whistleblower Case

David Gialanella, New Jersey Law Journal, Law.com

11-17-10 -- A New Jersey judge who, admitting he's "not a fan of fee shifting," denied Novartis Pharmaceuticals Corp.'s request for $500,000 in attorneys' fees for prevailing in a whistleblower case was reversed by an appeals court Monday. . . . The panel found that Morris County Superior Court Judge W. Hunt Dumont failed to consider the "totality of the evidence" in determining whether the lawsuit was frivolous, which would justify a fee award for the defense. . . . "We are constrained to reverse and remand because the trial court either failed to consider or simply failed to state its findings with regard to defendant's claim that plaintiff's lawsuit was commenced and continued in bad faith," the panel said in DiMaggio v. Novartis Pharmaceuticals Corp. , A-4810-07.


NEW YORK  

$13 Million Fee in Suit That Inspired "The Social Network" Approved

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

11-10-10 -- A state judge has confirmed an arbitration award that granted Quinn Emanuel Urquhart & Sullivan a $13 million contingency fee for its work on a lawsuit against Facebook Inc. that became a basis for the movie "The Social Network." . . . Monday's ruling by Manhattan Justice Richard Lowe III was the latest chapter in a two-year fight between the law firm and its former clients, the founders of ConnectU Inc., an early rival of Facebook. An arbitration panel in August awarded Quinn Emanuel its full 20 percent contingency fee of the reported $65 million settlement (NY Lawyer, Sept. 15).


NY Partner Congratulated on Firm's Remarkably Low $14.4 Million Fee

By Amanda Bronstad | The National Law Journal | New York Lawyer

11-09-10 -- A federal judge in California on Monday approved more than $14.4 million in attorney fees for Bernstein Litowitz Berger & Grossman as lead plaintiffs' counsel in a $125 million shareholder settlement involving bankrupt New Century Financial Corp., one of the largest lenders to collapse during the subprime mortgage meltdown. . . . During a final settlement hearing, U.S. District Judge Dean Pregerson in Los Angeles told Salvatore Graziano, a partner at the New York firm, that the award "might have set a record for the lowest" in attorney fees in a case such as this. . . . "Congratulations," he said.


NEVADA  

Las Vegas attorney indicted in ‘Save Your House’ foreclosure scam

By Steve Kanigher, Las Vegas Sun

11-04-10 -- A Las Vegas attorney and two others were indicted today for allegedly operating a foreclosure rescue scam in Las Vegas during 2008 and 2009, the Nevada Attorney General's office announced. . . . The indictment alleges that attorney Ramon Dy-Ragos, along with partners Jesus Baca, alias Jesse Baca, and Luis Baca operated a foreclosure rescue scam under the business name “Save Your House.” . . . Save Your House is alleged to have lured customers to pay large up-front fees ranging from $1,000 to $3,995. The defendants informed the victims they could prevent foreclosure by having customers stop paying their mortgage and ceasing all contact with the bank holding their mortgage. The defendants falsely claimed they would modify mortgages through negotiation with the mortgage holders or by suing them, authorities said.



October 2010

GENERAL

Avoiding ‘Wolf in Sheep’s Clothing’, Disguised Hourly Fees

By Patrick J. Lamb, ABA Journal

Editor's note: The New Normal is an ongoing discussion between Paul Lippe, the CEO of Legal OnRamp, and Patrick Lamb, founding member of Valorem Law Group. Paul and Pat spend a lot of time thinking, writing and speaking about the changes occurring in the delivery of legal services. We hope you will join their discussions.

10-20-10 -- Sorry to be hung up definitions, but as I wrote before, they are really important to have a meaningful discussion. . . . Sometime in 2009, I was talking to an in-house lawyer who, I had heard, was not a fan of alternative fee arrangements. When I inquired why, he said that he knew how much a certain kind of case had been costing his company. He asked a firm to propose a fixed fee for that group of cases, and the firm proposed a number that was higher than the average amount he had been paying. “Why would I ever want to lock in at a higher amount,” he said in somewhat exasperated tone. . . . A while later I was at an event where I was seated with the managing partners of two of the largest 50 firms in the country. Separately, both explained their general approach to calculating fixed fees, and the calculation methodology was virtually identical. Estimate the number of hours required to perform the engagement. Round up. Multiply the hours by the hourly rate of the person who would perform the work. Adjust for expected hourly rate increases. Add the numbers. Round up. This yields a total, and the fee is fixed at that total if the estimator feels good about the number or adjusted up if the estimator is less confident in the number. The phrase I apply to this type of calculation is “wolf in sheep’s clothing.” It is simply a disguised, dressed up, hourly fee.


Nev. Judge Passes Boies Fee Dispute to New York

Nate Raymond, New York Law Journal

10-20-10 -- Boies, Schiller & Flexner has suffered a setback in a fee dispute arising out of founder David Boies' alleged neglect of a client's lawsuit after a judge in Nevada ceded jurisdiction to New York courts to decide who should arbitrate their fight. . . . Judge Allan R. Earl of the Eighth Judicial District Court in Clark County, Nev., on Monday denied Boies Schiller's motion for appointment of an arbitrator in its scuffle with G.K. Las Vegas Limited Partnership. The ruling effectively gave Manhattan Supreme Court Justice Bernard J. Fried sole authority to determine the manner in which the $5 million fee dispute will be heard.


FLORIDA  

Lawyer is sued over fee demands

Henry Ferro is accused of harassing a former client for more money.

By Suevon Lee, Ocala.com Staff writer 

10-19-10 -- Some attorneys may firmly go after their clients if owed legal fees. But angrily claiming someone is delinquent on a payment in a crowded public space? . . . To one local resident, that wasn’t only unacceptable, it was cause for a lawsuit. . . . Especially since, as a complaint filed Friday in Marion County Circuit Court alleges, Ron Butler doesn’t owe the attorney, Henry Ferro, a dime more than what he already paid him three years ago. . . . That amount, according to Butler’s complaint, was the flat fee of $3,500 for Ferro’s work defending Butler’s son in a 2007 criminal case. Yet Ferro allegedly believes Butler owes a significantly greater amount: $14,000. And he has been demanding payment, according to the complaint, through harassing phone calls and, most recently, in a crowded Lowe’s store in Ocala. . . . There was no fee agreement signed. . . . Butler is suing Ferro, a Miami transplant who has practiced law in Ocala since 1997, for defamation for the “false and slanderous” statements he allegedly uttered in public about this contested amount. He also is seeking a temporary restraining order against the attorney to prevent him from further harassing him about this sum or making statements to third parties about any money owed.


GENERAL

Report Details Law Firm Earnings for TARP Work

Jenna Greene, The National Law Journal

10-15-10 -- For law firms advising the Treasury Department on the Troubled Assets Relief Program, it's one thing to win a fat government contract for legal services -- but another to actually see the cash. . . . The TARP watchdog, the Congressional Oversight Panel, released a report (pdf) Thursday detailing exactly how much Treasury has shelled out to the 18 law firms that have been awarded contracts since the program began in late 2008. In most cases, the difference between the potential contract value and the amount owed for services performed is significant. . . . Take Sonnenschein Nath & Rosenthal (now SNR Denton). In March 2009, the firm was awarded a contract to advise on auto investment, according to the report. TARP infused nearly $86 billion into the auto industry, propping up General Motors and Chrysler. . . . The legal services contract was worth a maximum of nearly $27 million. Sonnenschein got $1.8 million (plus $2.7 million for another auto contract). . . . Haynes and Boone was awarded the same March auto contract, and earned just $346,000.


2nd Circuit Recognizes Firm's Contribution, but Rebuffs $17 Million Fee Request

Noeleen G. Walder, New York Law Journal

10-15-10 -- A law firm that claimed it was "solely responsible" for a $245 million class action settlement has lost its bid to receive an additional $17 million in attorney fees. . . . While the 2nd U.S. Circuit Court of Appeals agreed that non-lead counsel Chimicles & Tikellis had conferred a substantial benefit on the class, it nonetheless held that the district court had not erred when it approved the lead counsel's allocation of only $155,610 in attorney fees to the Pennsylvania-based firm. . . . "Although Abbey [Spanier Rodd & Abrams] and Kirby [McInerney] were no doubt on the stingy side when it came to compensating their brethren, we have not been convinced that the District Court abused its discretion in approving class counsel's allocation," Judge Barrington D. Parker wrote for the circuit. . . . Judges Robert D. Sack and Richard C. Wesley rounded out the panel in In re: Adelphia Communications Corp. Securities & Derivative Litigation (No. II), 08-4904-cv. . . . The fee dispute arose from a wave of lawsuits brought against Adelphia Communications Corp., a cable television provider that went belly up after its founder, John J. Rigas, and his sons were accused of looting millions of dollars from the company.


Court Rules Attorney Fees Are Admissible in Tyco Battle

Victor Li, New York Law Journal

10-11-10 -- The latest salvo in the Tyco International litigation involves former Tyco director Frank Walsh Jr. and a $20 million "finder's fee" former CEO Dennis Kozlowski awarded him in connection with Tyco's 2001 acquisition of CIT Group. On Oct. 5, a federal judge ruled that Tyco could admit evidence relating to attorney fees incurred as a result of its internal investigation of the finder's fee, which Walsh received without board approval. . . . The court also ruled that Walsh could put forth an expert witness he claimed to have relied on in accepting his fee. Tyco's attorney, Mark Levine of Bartlit Beck Herman Palenchar & Scott, did not return phone calls for comment. Neither did Walsh's attorney, Michele Pahmer of Stroock & Stroock & Lavan.


GENERAL

Cadwalader Biggest Beneficiary as Treasury Adds Firms to Help Run TARP

Jenna Greene, The National Law Journal

10-04-10 -- In one of the federal government's biggest legal services contracts ever, the Treasury Department has hired 13 law firms to help run the Troubled Assets Relief Program at a cost to taxpayers of up to $100 million. . . . But the TARP watchdog, the Congressional Oversight Panel, has faulted the agency for excessive secrecy when it comes to its outside counsel, as well as the potential for conflicts of interest in managing the $700 billion program. . . . The lion's share of TARP legal work has gone to Cadwalader, Wickersham & Taft, which has already raked in more than $13 million since the program began in October 2008, according to the firm -- and that's not counting the new contract. Treasury declined a request by the oversight panel for a Cadwalader representative to testify at a Sept. 22 public hearing about transparency in TARP contracting, citing attorney-client privilege.


September 2010

GENERAL

$35 Million More in Interim Fees Awarded in Madoff Case

Noeleen G. Walder, New York Law Journal

09-15-10 -- Trustee Irving H. Picard and the team of lawyers liquidating Bernard L. Madoff's investment firm have been awarded another $34.6 million in interim counsel fees. On Tuesday, Southern District of New York Bankruptcy Judge Burton Lifland approved some $601,000 in fees to Picard and $34 million in fees to Baker & Hostetler for Feb. 1 through May 31. To date, the judge has awarded Picard and his attorneys nearly $97 million in fees. . . . Lifland also approved fee awards for several other law firms assisting Picard in unraveling the massive Ponzi scheme perpetrated by Madoff, including an award of $2.2 million to Windels Marx Lane & Mittendorf, which serves as special counsel to the trustee.


DISTRICT OF COLUMBIA  

Departures From Billing Standards Lead to Loss of $424,000 in Fees

Mary Pat Gallagher, New Jersey Law Journal

09-15-10 -- Law firms are free to use block billing and measure their time in quarter-hour increments, but those practices can come back to bite them and their clients when they apply for fees in federal court. . . . A federal judge in Newark on Sept. 10 slashed $424,332 from a $2.9 million fee request because those methods could have led to or obscured overbilling. . . . Sun Pipe Line Co. had asked for $2,849,937, the amount it paid its lawyers at Beveridge & Diamond of Washington, D.C., during nine-year-long litigation over who would pay tens of millions of dollars to clean up a New Jersey Superfund site. . . . But U.S. District Judge Susan Wigenton held that Sun should get only $2,425,605, plus an additional $506,197 in expenses and expert charges, for a total of $2,931,802, compared with the $3,399,499 sought.


GENERAL

Gender Pay Gap at Law Firms Not Performance-Based, Say Researchers

Researchers did a statistical analysis of compensation at the 200 U.S. firms reporting the most revenue between 2002 and 2007

Karen Sloan, The National Law Journal

09-14-10 -- Lower productivity is one theory as to why women partners at law firms earn less on average than their male counterparts. . . . But it's not true, according to research by law and business professors from Temple University and the University of Texas-Pan American. They concluded that women lawyers are just as productive as men, even though they consistently earn less. . . . "Our data show that women partners outperform their men counterparts," they wrote. "If these women are underpaid and undervalued in terms of rank despite their conformity to a lockstep pattern, the inequalities could be due to intentional discrimination."


CALIFORNIA   \

Calif. Appeals Court Approves Contingency Fee Greater Than Client Award

09-02-10 -- A California appeal court on Tuesday sided with Cotchett, Pitre & McCarthy in a dispute over a novel contingency fee deal that called for more legal fees than the amount of money the client recovered. . . . Upholding an arbitration award for the firm of $7.5 million, San Francisco's 1st District Court of Appeal rejected arguments that the award -- based on a contingency fee of 16 percent of the client's estimated damages -- was unconscionable. . . . "Although the fee agreement in this case was somewhat unusual, it reflected an attempt by equally sophisticated parties to share the risk of complicated litigation," wrote Justice Henry Needham Jr. in the published opinion. Justices Barbara Jones and Mark Simons concurred.


August 2010

GENERAL

Plaintiffs Lawyers in 9/11 Cases Lose Bid to Recoup $6.1 Million in Interest

Mark Hamblett, New York Law Journal

08-30-10 -- Plaintiffs lawyers in the 9/11 respiratory cases cannot pass on to clients some $6.1 million in interest costs associated with financing the massive litigation, Southern District Judge Alvin K. Hellerstein ruled Friday. . . . Even though lead lawyer Paul Napoli marshaled opinions by bar associations, court cases and experts to show that borrowing to finance litigation and passing the cost to clients is both legal and ethical, Hellerstein said he would not allow it. / Read Napoli's filing. / "Mr. Napoli, I can tell you now, I'm not going to allow this charge," the judge said. "I'm not saying it was unethical. I'm not saying you didn't try to stay attuned to the rules of professional responsibility. What you're getting is too much." . . . The judge's decision came as all sides in the litigation are pressing to convince some 10,000 plaintiffs who suffered respiratory and other illnesses in the response to and cleanup after the Sept. 11, 2001, terror attacks to accept a settlement that could run as high as $712.5 million.


CALIFORNIA  

Judge slashes Calif. election case attorney fees

By Michael R. Blood Associated Press Writer, San Jose Mercury News

08-26-10 -- A Madera County judge slashed more than $1.6 million from legal fees sought by attorneys who filed a lawsuit against a school district over the way it conducted elections, officials said Thursday. . . . The Madera Unified School District did not contest the 2008 lawsuit, but lawyers billed the district for $1.2 million, a fee later increased to $1.8 million, according to district officials. The district called the attorneys' bill a money grab and feared it would force administrators to cut money for books and lunches to pay it. . . . In an order issued Monday, Superior Court Judge James Oakley reduced the amount to $162,500 for the Lawyers' Committee for Civil Rights of the San Francisco Bay Area, law professor Joaquin Avila and the firm of Gibson, Dunn and Crutcher, which sought the fees.


NEW JERSEY  

Master in Prudential Fraud Case Lowers His Fees as Plaintiffs Seek His Ouster

Judge defends appointment of special master and the hours billed

Charles Toutant, New Jersey Law Journal

08-26-10 -- The special master appointed to handle discovery in a mammoth fraud and bribery suit against Prudential Life Insurance Co. has agreed to reduce his fees, even as the plaintiffs lawyers are trying to dispense with him altogether. . . . William Hunt said in an Aug. 19 letter to the parties that he would cut his hourly rate from $450 to $350. The concession came after plaintiffs lawyer Angela Roper sounded alarms over the $77,265 bill Hunt submitted for his first three weeks on the job. The rate reduction, retroactive to Hunt's appointment, will shave about $17,000 off the total. . . . But Roper says she will nonetheless proceed with her motion, filed July 30, for an emergent interlocutory appeal of Hunt's appointment in the case, In re Prudential Life Insurance Co. of America Litigation, AM-00820-09.


NEW YORK  

Already Under Fire, Lawyers for 9/11 Workers Are Ordered to Justify Some Fees

By Mireya Navarro   New York Times

08-27-10 -- The lawyers representing most of the ground zero workers who sued the city over health issues will be appearing in court in a new role: defending themselves. . . . The federal judge overseeing the cases has summoned the law partnership of two firms, Worby Groner Edelman and Napoli Bern Ripka, to a hearing on Friday to justify $6.1 million in legal expenses that they are charging their clients. . . . Next week, the lawyers are due back in federal court to respond to accusations of overcharging made by the other leading law firm representing workers. That firm, Sullivan Papain Block McGrath & Cannavo, alleges that its co-counsel is trying to inflate its fees by inappropriately charging clients more than $400,000 for publicists, lobbyists and legal and medical experts as case-related costs.


Claiming Excessive Fees, Patent Holder Sues Law Firms for $10 Million

Nate Raymond, New York Law Journal

08-26-10 -- A retired university professor who has pursued dozens of electronics companies for patent infringement on Monday filed a notice to sue her former attorneys for $10 million, accusing them of misusing escrow funds and charging her excessive fees. . . . Gertrude Neumark Rothschild filed a summons in Manhattan Supreme Court against Troutman Sanders; an intellectual property boutique chaired by Albert L. Jacobs Jr. before he became a partner at Troutman; and Jacobs.

Read the Troutman Sanders and Albert Jacobs LLP complaints.


GENERAL

Pepper Hamilton Sues FDIC Over Legal Fees

Gina Passarella, The Legal Intelligencer

08-25-10 -- Pepper Hamilton has sued the Federal Deposit Insurance Corp. after it classified as unsecured Pepper Hamilton's claims for legal fees involving work for a division of bankrupt Advanta Corp. and the FDIC. . . . The firm asserted a claim against the FDIC as receiver of Utah-based Advanta Bank Corp. -- a division of Spring House, Pa.- based parent company Advanta Corp. -- for a total of $260,338. That included a $139,233 administrative claim and a $121,105 unsecured claim, according to the complaint filed last week in the U.S. District Court for the District of Columbia in Pepper Hamilton v. FDIC. . . . The work was done before and during the time Advanta Bank went into receivership, as ordered by the Utah Department of Financial Institutions. The FDIC was named receiver of the bank.


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MINNESOTA   

Minneapolis attorney's $1.6 million award upheld

Brian L. Williams had sued his former employers, claiming they didn't cut him enough of a settlement that he helped to negotiate.

By Abby Simons, Star Tribune 

08-25-10 -- The Minnesota Court of Appeals has upheld a $1.6 million award to a Minneapolis attorney who claimed his law firm failed to give him a proper cut of a large settlement he helped negotiate for the state of Minnesota and others in a securities fraud suit. . . . However, the court also ruled that Brian L. Williams is not entitled to collect punitive damages from his former employer, Heins Mills & Olson. . . . A Hennepin County jury awarded Williams $1.6 million in June 2008, based on his claim that he had been cut out of some of the legal fees he earned in a securities fraud case against AOL Time Warner.


OHIO  

Ohio Lawyer Suspended for Billing More than 24 Hours in a Day

By Debra Cassens Weiss, ABA Journal

08-25-10 -- An Ohio lawyer has been suspended for overbilling local courts for her representation of poor clients, submitting bills for more than 24 hours a day on three different occasions. . . .. . The lawyer, Kristin Ann Stahlbush of Toledo, will be suspended for two years, with the second year stayed if she completes a one-year probationary period, the Legal Profession Blog reports. / Here is the court's opinion.


GENERAL

Judge Approves Less Than Half of Milberg's 'Unusual' Added Fees Request

Nate Raymond, New York Law Journal

08-23-10 -- A federal judge has slashed what he called an "unusual" request for additional fees by Milberg for a 2006 settlement of a securities class action against Nortel Networks Corp. . . . Milberg, along with its Canadian co-counsel and the settlement's claims administrator, asked for $2.77 million in fees and expenses not included in their 2007 fee applications. Southern District of New York Judge Richard M. Berman, citing the "very substantial" $38 million in fees and expenses already awarded to Milberg and Koskie Minsky, based in Toronto, approved only 41 percent of the request. . . . The settlement stemmed from lawsuits filed in 2001 over an accounting scandal at Nortel, a Canadian-based manufacturer of telecommunications equipment.


CALIFORNIA  

Firm Says Its Fee in Beverly Hills Divorce Will Hit $1 Million

Amanda Bronstad, The National Law Journal

08-23-10 -- Lawyers at a boutique family law firm in Beverly Hills, Calif., are touting a judge's award of $1 million in legal fees as one of the largest granted in a divorce case prior to trial. . . . Steven Knowles and Michael Collum, who founded Knowles Collum last year, received the fee award during a hearing on Aug. 12. Los Angeles County, Calif., Superior Court Judge David Cunningham granted more than $20,000 in temporary monthly spousal and child support to Kathrin Saadian in her divorce from Beverly Hills real estate investor George Saadian. A trial is scheduled in December. . . . "This is a large fee award by any standard, even for a large firm," said Collum, whose firm represents Kathrin Saadian. "For a small firm, I've never heard of it."


FEDERAL COURTS

Judge Won't Enjoin Fee Fight Between Firms in Cell-Phone Contract Litigation

Lakin Chapman claims it has a right to fees as damages for breach of contract by Freed & Weiss in 'Larson v. Sprint Nextel Corp.'

Mary Pat Gallagher, New Jersey Law Journal

08-20-10 -- A U.S. judge in Newark on Wednesday allowed an arbitration to proceed between two Illinois firms over a portion of $5.775 million in legal fees approved as part of a class action settlement. . . . Lakin Chapman of Wood River, Ill., claims it has a right to one-third of the fees, or $1.925 million, as damages for breach of contract by the Chicago firm of Freed & Weiss, class counsel in Larson v. Sprint Nextel Corp., 07-cv-5325. . . . The suit challenged the imposition of flat-rate, early-termination fees on cell-phone contracts. . . .U.S. District Judge Jose Linares denied Freed's motion to enjoin the arbitration on the basis that it would essentially re-litigate Linares's earlier decision approving the settlement and allocating fees.


9th Circuit Reverses $29 Million Fee Award Over Procedural Problem

Leigh Jones, The National Law Journal

08-20-10 -- A federal appeals court has snatched away a $29 million fee award that two law firms received for serving as lead plaintiffs counsel in a California backdating securities class action. . . . The 9th U.S. Circuit Court of Appeals on Wednesday vacated a lower court ruling granting the fee award to New York's Labaton Sucharow and Glancy Binkow & Goldberg of Los Angeles. In a 2-1 decision, an appeals panel held that U.S. District Judge Jeremy Fogel denied the plaintiffs in the backdating case the opportunity to argue for reducing the fee. The panel remanded to Fogel, who sits in the Northern District of California.


ALABAMA  

Ala. Governor Limits Attorney Fees in Oil Spill Lawsuit

The Associated Press, Law.com

08-17-10 -- Alabama Gov. Bob Riley has signed an executive order limiting attorney fees in lawsuits the attorney general has filed over the massive oil spill in the Gulf of Mexico, a decision that reignites a political feud between the two politicians. . . . Riley signed the order Thursday, shortly before Attorney General Troy King sued British oil company BP PLC and three other companies involved in an April 20 explosion aboard the Deepwater Horizon drilling rig. The accident triggered the nation's worst offshore oil spill, closed fisheries and sent oil washing onto Alabama's coastline. . . . King sued against the wishes of Riley, who had hoped to reach an out-of-court settlement with the companies.


NEW JERSEY  

Fight Continues Over Split of $4.8 Million Fee in Dram Shop Case

Court disputes judge's analysis of hours, criticizes his 'dismissive manner'

Mary Pat Gallagher, New Jersey Law Journal

08-16-10 -- Two law firms fighting over nearly $5 million in legal fees in a record-setting dram shop case will battle on, thanks to an appeals court decision Thursday that reversed the award of more than $4.6 million to one of them. . . . At issue are the fees in Verni v. Lanzaro, A-4058-07, in which a jury in 2005 awarded $105 million in damages over a 1999 drunken-driving crash that paralyzed Antonia Verni, then 2 years old. . . . The verdict was overturned on appeal and the case ultimately settled for $25 million in June 2007, with $4,853,146 designated for legal fees. . . . Since then, Rosemarie Arnold, whose firm originated the case, and David Mazie, who took it over and brought it to trial and settlement, have been vying over their share of the money.


TEXAS  

Judge Approves Nearly $500,000 for Counsel Who Won Title VII Suit

John Council, Texas Lawyer

08-16-10 -- If there's a lesson to be learned in Naiel Nassar v. University of Texas Southwestern Medical Center it is that a plaintiffs attorney who puts on a "superb" civil rights case can win nearly all of her requested attorney fees -- even when she charges $750 an hour. . . . That's what happened on July 27 when U.S. District Judge Jane Boyle of Dallas approved nearly all of the half-million dollars in attorney fees requested by four lawyers who represented a plaintiff in a successful employment discrimination and retaliation suit against UT Southwestern. . . . Dr. Naiel Nassar sued UT Southwestern alleging violations of Title VII of the Civil Rights Act of 1964. One of Nassar's lawyers, Charla Aldous, says UT Southwestern offered to settle the suit for $40,000, but Nassar declined. In May, Nassar won a $3.6 million jury verdict. And now UT Southwestern must pay his legal fees.


FEDERAL COURTS

In $22 Million Fee Swing, 9th Circuit Vacates Attorney Fee Award to EchoStar

EchoStar ordered to pay $18 million to opposing counsel from NDS

Alison Frankel, The American Lawyer

08-12-10 -- In 2002, when the digital satellite company EchoStar joined a suit against pay-TV provider NDS, EchoStar aimed high. Its lawyers at DLA Piper and T. Wade Welch & Associates accused NDS of breaching EchoStar's programming security codes and posting them on the Internet for sale to pirates across the globe. EchoStar demanded about $1 billion from NDS in damages and disgorgement penalties and another $1 billion in statutory damages. . . . Six years later a federal district court jury in Santa Ana, Calif., found that NDS had, in fact, intercepted EchoStar's satellite signal in a single test of piracy methods. Jurors deemed the interception a technical violation of the federal Communications Act and a California statute. . . . But they awarded EchoStar a whopping $45.69 in actual damages and $1,500 in statutory damages -- not exactly the $2 billion EchoStar sought. The verdict suggested that the jury entirely rejected EchoStar's theory that NDS illicitly assisted the pirating of EchoStar's signal.


GEORGIA  

Firms Fight Over $1 Million Contingency After Attorney Move

Greg Land, Fulton County Daily Report

08-06-10 -- A pair of law firms are fighting over a $1 million contingency fee from a suit in which a lawyer started working on the case at one firm but completed it at a second. . . . The second firm, the Kopelman Sitton Law Group, is winning the fight so far. On July 9, a Fulton County, Ga., jury awarded the first firm, Martin & Jones, only $20,750. . . . But the debate is not over. Martin & Jones, based in Raleigh, N.C., with a small Atlanta outpost, is expected to appeal the Fulton verdict. And Clint W. Sitton, the lawyer who switched firms, has asked a Fulton judge to declare that he owes his former firm nothing. . . . Martin & Jones has removed that action to federal court -- and filed a counterclaim.


VIRGINIA  

Judge: Nixon Peabody Charged Excessive Fees in Aviation Legal Battle

Leigh Jones, The National Law Journal

08-03-10 -- A federal judge has ruled that Nixon Peabody charged excessive fees in a legal battle between aviation companies operating at Washington Dulles International Airport. . . . U.S. District Judge James Cacheris of the Eastern District of Virginia determined that Nixon Peabody's $1.57 million in fees was too high and slashed about $440,000 off that amount, awarding $1.13 million. . . . The ruling stemmed from a court fight between Signature Flight Support Corp., Nixon Peabody's client, and Landow Aviation.


July 2010

NEW YORK  

Suit Challenging Bills From Constantine Cannon Goes Forward

Client seeks return of $628,000 in previously paid fees

Nate Raymond, New York Law Journal

07-30-10 -- The claim of a former client of Constantine Cannon that the law firm excessively billed for legal fees is moving forward. . . . The decision by Manhattan Supreme Court Justice Carol Edmead came in what began as a lawsuit by Constantine Cannon to recover $359,000 in unpaid legal bills from the family of Howard L. Parnes, a White Plains, N.Y., real estate executive. The Parnes family struck back, contending the firm did not execute an engagement letter and overbilled the family. . . . Edmead dismissed the family's affirmative defense and counterclaim that the law firm and client had not executed an engagement letter, saying the law does not prevent Constantine Cannon from collecting the fees without a proper retainer agreement. But the judge said the Parnes family had sufficiently pleaded that it had been overcharged, demanding that nearly $628,000 in "improperly earned" fees be returned.


PENNSYLVANIA  

A lawyer in the Lower Merion webcam case wants to be paid now

By Derrick Nunnally, Inquirer Staff Writer  

07-27-10 -- The Lower Merion webcam case is far from over, but the plaintiffs' legal costs already exceed $400,000 - and the lawyers are asking to be paid now. . . . Mark S. Haltzman, lead attorney for student Blake Robbins, asked a federal judge Monday to order the Lower Merion School District to pay $418,850.60 while the case is pending. . . . The request comes on top of expenses - estimated in June at $780,000 - Lower Merion has covered for outside lawyers and computer experts since the lawsuit over privacy violations was filed Feb. 16. . . . The court, Haltzman wrote, has already ordered the district to end the monitoring of students' school-issued laptops' cameras, as Robbins requested when the lawsuit was filed Feb. 16.


WISCONSIN    

Ambac case lawyers, advisers get $18 million

Doyle donors draw high share; lawyer say ties played no role

By Cary Spivak of the Journal Sentinel

07-26-10 -- With more than $67 billion of its insurance coverage placed into a special receivership fund, Ambac Assurance Corp. is flirting with financial ruin. Yet at the same time, lawyers and consultants helping Wisconsin regulators navigate the complex case have collected nearly $18 million for their efforts. . . . And the meter is still running. . . . At the top of the billing list, state records show, is Foley & Lardner, the Milwaukee-based law firm with close ties to Gov. Jim Doyle. Employees of Foley have contributed $355,596 to Doyle's campaigns since 1999, more than any other group from one employer, according to data analyzed by the nonpartisan Wisconsin Democracy Campaign at the Journal Sentinel's request.


NEW YORK  

Prevailing Party's Bid for Fees Fails 'Exacting' Test, N.Y. Court Finds

Daniel Wise, New York Law Journal

07-23-10 -- The prevailing plaintiff in a contract dispute cannot invoke an indemnification clause to recover more than $700,000 in attorney fees under an "exacting" test set by the New York Court of Appeals in 1989, a unanimous panel of the state Appellate Division, 1st Department, ruled Tuesday. . . . Even though a lower court's interpretation of the indemnification clause was not "irrational," Justice David B. Saxe concluded in Gotham Partners v. High River Limited Partnership, 2582/04, that a $737,000 fee award must be reversed because of "the strict standard" imposed by the Court of Appeals in Hooper Associates v. AGS Computers, 74 NY2d 487. Saxe, interpreting Hooper, said that "for an indemnification clause to serve as an attorney's fee provision, the provision must unequivocally be meant to cover claims between the contracting parties rather than third-party claims."


NEW YORK  

Where the Money Went in Settlement Gets NY Law Firm Sued by Litigation Lender

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

07-14-10 -- A litigation funding company may move forward with a lawsuit against Parker Waichman Alonso, a personal injury law firm, over monies the company says it is owed from a 2007 settlement. Justice Joseph Maltese of Richmond County Supreme Court denied the law firm's motion in PS Finance LLC v. Parker Waichman Alonso LLP, 100292/2010, to dismiss a suit by PS Finance LLC. . . . PS Finance had lent $34,750 to Timothy Farmer, a client of Parker Waichman, while the suit was pending in Queens County Supreme Court. When the suit settled in 2007 for $192,000, Mr. Farmer asked that the settlement be broken down with $92,000 going to his current wife, Ruth Ann Farmer, who was not a signatory to PS Finance's funding agreements but was a plaintiff in the case. After deducting attorney's fees and a child support lien, PS Finance received $30,440 from Mr. Farmer's share of the award, which was not deposited.


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CALIFORNIA  

Novel Fee Fight Lands at Calif. Appeals Court

Mike McKee, The Recorder

07-12-10 -- One side calls a case going before a state appeal court this week an "ordinary fee dispute," while the other insists it raises issues about contingency agreements and arbitration that no court has ever addressed. . . . At the very least, the case involves millions of dollars in attorney fees and a novel agreement based not on the client's recovery of damages, but on the estimated damages the client might suffer. . . . "We've not been able to locate a published decision that provides for that type of contingency fee agreement," Gibson, Dunn & Crutcher partner Daniel Kolkey, who will argue the case for Universal Paragon Corp., a San Francisco-based real estate development company, said Thursday. . . . He also said the fee award of more than $8 million "appropriates 100 percent of the value" of Universal Paragon's settlement in the case, which is valued at $7.8 million.


DISTRICT OF COLUMBIA  

D.C. Fights $3.1 Million Fee Request in High Court Gun Case

Mike Scarcella, The National Law Journal

07-12-10 -- Lawyers for the District of Columbia are fighting a request from a private attorney who wants more than $3.12 million in fees for successfully challenging the city's handgun ban. . . . The attorney, Alan Gura, who argued and won D.C. v. Heller in the U.S. Supreme Court, said in court papers that prosecuting the case was "far more protracted and difficult" than anticipated. Gura, who recently won another landmark handgun case, is pushing for a fee enhancement. . . . In response, lawyers for the district have filed papers calling Gura's petition for fees "a study in unreasonableness." Attorneys with the city's Office of the Attorney General filed court papers Friday in federal district court in Washington opposing Gura's request. Click here for a copy of the city's court filing.


NEW YORK  

N.Y. Firm Sued for Advising Clients to Invest in Ponzi Scheme

Plaintiff seeks at least $700,000 from the law firm and its partners

Nate Raymond, New York Law Journal

07-12-10 -- A Tarrytown, N.Y., law firm has been sued for fraud and breach of contract by a New Jersey woman who claims the firm advised her to place substantial funds with a money manager who was operating a Ponzi scheme that collapsed last year. . . . In a lawsuit filed earlier this month in Westchester County Supreme Court (See Complaint), Patricia Romano claims her former lawyers at Cushner & Garvey advised her to invest funds from an $875,000 settlement with her ex-husband with Edward Stein, a purported money manager, who embezzled the funds. Under the settlement agreement, the funds were supposed to be placed in trust accounts at Morgan Stanley. . . . Last year Stein was arrested and charged with running a $30 million Ponzi scheme. . . . Romano also alleged that Cushner & Garvey did not disclose that Stein was a client, from whom it also took fees for referrals.



NEW YORK  

NY Lawyer Indicted for Overbilling Dead Clients

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

07-09-10 -- Michael Lippman, who had been counsel to the public administrator in the Bronx for more than 30 years when he was terminated in April 2009, pleaded not guilty yesterday to charges of taking excessive fees for his work on five estates, amounting to $300,000. . . . A 15-count indictment brought by the Bronx District Attorney's Office also accused Mr. Lippman of filing false documents to conceal the excessive fees. . . . Mr. Lippman surrendered yesterday and prosecutors agreed to his release without bail by Acting Supreme Court Justice Steven L. Barrett. . . . Mr. Lippman's lawyer, Murray Richman, said "there is no basis for the charges." The alleged thefts took place before guidelines set in 2002 by the Administrative Board of the Offices of the Public Administrators were adopted, he added.


Simpson Legal Fees for KKR, Blackstone IPOs Seem Worlds Apart

Brian Baxter, The American Lawyer

07-09-10 -- Wednesday was a big day for news involving two prominent private equity clients of Simpson Thacher & Bartlett. . . . The Blackstone Group announced that Simpson M&A partner John Finley would become its new chief legal officer in September, replacing Robert Friedman, who joined the New York-based private equity firm in 1999 after 25 years as an M&A partner at Simpson. . . . And The New York Times detailed the differences in compensation packages to executives in Blackstone's mammoth $4 billion IPO in June 2007 and in the hotly anticipated planned offering by Kohlberg Kravis Roberts & Co. scheduled for next week. Former Simpson M&A partner David Sorkin became KKR's first-ever general counsel in November 2007. Recent SEC filings by KKR show that he earned nearly $4.5 million in 2009. . . . The gulf in compensation isn't the only surprise found when comparing the two IPOs. When we looked at SEC filings by Blackstone and KKR leading up to their respective IPOs, we noticed some stark differences in the legal fees listed by Simpson for the work done on both offerings. Three years, it seems, makes a world of difference.


GENERAL

Lawyers in Wiretapping Suit Submit Their Bill: $2.6 Million

Dan Levine, The Recorder

07-08-10 -- The plaintiffs' tab in a widely watched state secrets case has arrived. Whether it will ever be paid is still an open question. . . . Lawyers representing Al-Haramain Islamic Foundation in a suit over illegal wiretapping are seeking more than $2.6 million in fees, the result of thousands of hours spread over several years, including a trip to the 9th U.S. Circuit Court of Appeals. Lead counsel Jon Eisenberg requested that Northern District Chief Judge Vaughn Walker award him over $1.2 million, based on 2,497 hours at $506 per. That hourly rate is based on a standard fees matrix, adjusted to approximate Bay Area rates.


GENERAL

Fee Fight Breaks Out Over Multimillion-Dollar Microsoft Case

A settlement in the underlying lawsuit, alleging that Microsoft had engaged in anti-competitive conduct, was announced in 2007

Michael J. Crumb, The Associated Press, Law.com

07-07-10 -- Attorneys representing 23 states involved in a class action lawsuit against Microsoft Corp. have filed a lawsuit over attorney fees against the Iowa lawyer who spearheaded a $179.5 million settlement with the software company. . . . Roxanne Conlin of Des Moines negotiated the 2007 settlement that included $75 million in attorney fees that she split with attorney Richard Hagstrom and the Zelle Hoffmann law firm of Minneapolis. . . . Conlin and Hagstrom filed the lawsuit against Microsoft, which is based in Redmond, Wash., claiming the company engaged in anti-competitive conduct that caused consumers to pay more for software between 1994 and 2006. The settlement was announced in August 2007. . . . The lawsuit claims that attorneys in 23 states provided advice, pleadings, participation and prosecution in the class action case in their states, and in the Iowa case against Microsoft.


NEW YORK  

Chadbourne Sues Ex-Partner in Fee Dispute

Nate Raymond, New York Law Journal

07-06-10 -- Chadbourne & Parke has sued a former partner over a fee awarded in a matter involving trusts for descendents of department store magnate Marshall Field. . . . The suit, filed last week in Manhattan Supreme Court (See Complaint), targets Charles F. Gibbs, a veteran trusts and estates lawyer who left Chadbourne in 2000 to join Holland & Knight. Gibbs had been appointed by Surrogate's Court as guardian ad litem in the Field matter in 1992. Chadbourne, which continued to provide legal services on the matter after Gibbs left the firm, claims Gibbs refuses to split an $875,000 fee awarded by the court in September 2009. . . . The award was reduced 25 percent from an initial fee application for $1.16 million based on work performed by Gibbs and Chadbourne from 1992 to 2002. Chadbourne said it is owed at least $768,000 based on the reduced award. . . . In a statement, a firm spokesman said the court-awarded monies "are owed to Chadbourne" and "the firm has asked for those monies to be attached so that they can be preserved pending the court's resolution of this matter." 



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


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INAUGURATED ON: September 6, 2004
Updated 01/26/2012