Unreasonable Legal Fees: How Much is Too Much?

What makes a flat fee for a lawsuit so large that it is unreasonable?  A recent news article makes me wonder if a flat fee would be unreasonable just because it may be two or three times higher than any other law firm would charge.  According to THIS post from the Wall Street Journal Law Blog, Joe Nacchio, the former CEO of Qwest Communications, the high speed internet company, has sued his former lawyers in New Jersey state court for malpractice, claiming that they were negligent for grossly over billing him. 

His lawsuit alleges that his lawyers breached their fiduciary duties because they charged him a flat fee of $5 million to defend him on insider trading charges and an additional $20 million to defend him in several related civil suits.  The full complaint is linked HERE.  The complaint is pretty short on facts relating to the underlying litigation.  Mr. Nacchio does not even state how many different civil suits there were.  Nor does he allege the scope of the litigation or the time frame.  He doesn't really state why the fees were excessive, he just concludes that they were. 

If the Nacchio case had happened in Illinois, and if we knew a little bit more about it, we could analyze it under Illinois Rule of Professional Conduct 1.5, which prohibits lawyers from collecting an unreasonable fee or an unreasonable amount for expenses.  Under Rule 1.5, the factors to be considered in determining the reasonableness of a fee include the following:

• the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
• the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
• the fee customarily charged in the locality for similar legal services;
• the amount involved and the results obtained;
• the time limitations imposed by the client or by the circumstances;
• the nature and length of the professional relationship with the client;
• the experience, reputation, and ability of the lawyer or lawyers performing the services; and
• whether the fee is fixed or contingent.

I don't disagree with anything in the Illinois rule, but the sophistication of the client should also be a factor.  The CEO of multi-billion company who is facing 25 years in prison and potential civil liability into the hundreds of millions may set out to hire a specific law firm even at an increased cost. The client may wish to secure a particular lawyer or law firm's reputation, skills, experience with the judge, etc.  The client always has the option to seek a competitive bid from another law firm, but sometimes people are not simply looking for the cheapest lawyer.

In this case, the client signed on the dotted line with a particular lawyer, Herbert J. Stern.  Mr. Stern was a federal judge for 13 years.  He's a former U.S. Attorney.  He charges a lot of money.  Clients know that before they call him.  I'm guessing Joe Nacchio didn't pick his name out of the yellow pages.  I don't see how Mr. Nacchio can now claim that a flat fee to which he already agreed is unreasonable.  Sounds like a case of buyer's remorse following his 70 month sentence and $63.6 million in fines and restitution.

Illinois Supreme Court Announces Public Domain Citation System

The Illinois Supreme Court announced a new way of officially citing its case and those of the Illinois Appellate Court. The new citation system is required because the Court will no longer publish the official opinions in bound volumes.  The new method of citation goes into effect July 1, 2011, when the current contract for printing the advance sheets and bound volumes of court opinions expires.  From that point forward, the only place to find the entire body of Illinois case law will be online.  

These changes direct the Illinois Supreme Court and the Illinois Appellate Court to assign at the time of filing a public-domain case designator number, as well as internal paragraph numbers to all opinions and Rule 23 orders. While the rule changes require official citation to the public-domain numbering and paragraph scheme, they continue to allow parallel citations to the unofficial regional reporters such as the North East Reporter and Illinois Decisions.

An example of a Supreme Court citation under the new system would look like this:

People v Doe, 2011 IL 102345, ¶15.

This shows the name of the case, 2011 as the year of decision, the Illinois Supreme Court as the court of decision, 102345 as the court-assigned identifier number which is the docket number of the case, and a pinpoint reference to the 15th paragraph in the opinion.

An example of a Third Distirct Appellate Court decision would look like this:

People v. Doe, 2011 IL App (3d), 101234, ¶15.

In the Appellate Court, the unique identifier number would consist of the last six digits of the docket number.  Unpublished orders filed under Supreme Court Rule 23 will have the letter “U” appended to the unique-identifier number. Rule 23 orders will still be posted to the Court’s web site.

The Supreme Court's press release can be read HERE.

Discharged Firm May Collect Contingency Fee.

In DeLapaz v. Selectbuild Construction, Inc., 394 Ill. App. 3d 969, (1st Dist. 2009), the plaintiff, Rafael DeLapaz, hired law firm Touhy & Touhy, Ltd. (Touhy) on a contingency fee basis to bring a negligence action.

Touhy lawyer James Zouras handled essentially all of the attorney work on the DeLapaz matter until he was terminated by Touhy for unknown reasons. Zouras then started a new firm and took the DeLapaz matter with him. Shortly thereafter, the matter settled and Touhy and Zouras both sought the right to be paid the contingency fee.

The trial court awarded Touhy its contingency fee and allocated a small portion of the fee to Zouras’ new firm on a quantum meruit basis. Zouras appealed.

The appellate court affirmed. The appellate court first cited the general rule that a discharged attorney (i.e., Touhy) normally is NOT entitled to the original contract contingency fee, which terminates upon discharge, but is entitled to be paid on a quantum meruit basis for services rendered prior to the discharge.

However, the appellate court relied on an established exception recognized by the Illinois courts, which holds that a discharged firm is entitled to its contract fee and the successor counsel merely entitled to a fee based on quantum meruit in cases where the overwhelming majority of that work was done at the original firm.

The courts have more discretion in allocating fees between former and successor law firms than I realized. Attorneys seeking fees in these situations should stress the relative contributions of their firm in the pleadings.

Improving Cash Flow

Here is a link to a brief article by John W. Olmstead in which he gives several pointers that law firms can use to increase their monthly cash flow. There is some really good advice here about staying on top of your accounts receivable.

Google Scholar

As most of you know, Westlaw is expensive. Really expensive. I suspect that most firms only maintain subscriptions to certain local databases, as my firm does.

Thankfully, Westlaw alerts you when you are about to be charged for accessing documents outside of your plan. You are then given the option to click through and incur the charge or exit. Last year, I was up against a deadline and I needed some information relating to a UCC Article 9 sale, my client authorized the charges and I wound up spending close to $200 in about 15 minutes.

Over the past couple of weeks, there have been two or three occasions where I needed to access bankruptcy cases and other federal cases outside of our subscription. I found everything I needed on Google Scholar for free in about 30 seconds.

To find caselaw on Google, go to Google Scholar. There will be two choices directly beneath the search box. One is for articles and the other is for legal opinions and journals. Click legal opinions and journals and search away.

I haven't tried any searches just based on search terms, so I don't know how well that works. I always have the citation. This is a really convenient service when a case has been cited to you, and you want to grab a copy of it for free.

I don't think I would rely on Google for all of my research, however, because it doesn't Shepardize cases.

Why your lawyer won't take your phone calls.

From The Stubborn Writer:

The top ten reasons why your lawyer won't take or return your phone calls.

Very insightful stuff.

Best Lawyer Advertisement. Ever.

My Rendition of a Career as an Attorney

How about some art on this blog? Bored one night studying for Constitutional Law, I decided to take a picture of this small lamp with my iPhone. Recently I gave it a symbolic twist and submitted it to win a scholarship...fingers are crossed! Enjoy!

Big time.

The judge in Lehman Brother's bankrupty case has approved $55.14 million in legal fees for New York law firm Weil Gotshal & Manges. Those fees were incurred in the four month period from September 2008 through January 2009.

The awarded fees amount to about $357,000 a day for the firm, or nearly $15,000 an hour around the clock. The firm employed 490 lawyers on the case. The lead partner on the file, Harvey Miller, billed 795 hours at $950 per hour, or $755,250. The firm also billed $2.77 million in expenses. Click here for a report from the Wall Street Journal.

A “fee committee” appointed by the judge reviewed fee and expense requests and found very few issues. The committee determined only $223,262 of the fees and $75,000 of the expenses did not pass muster, most because they were inadequately described in the fee petition.

The committee also recommended that in the future further explanations were needed for charges of more than 18 billable hours in a day for one person and hotel charges exceeding $500 a day. The committee also suggested overtime and working meals be limited to $20 a person and that car services only be used after 8 p.m. and limited to $100 a trip.

Judge finally rules on 24 year-old motion.

From the Associated Press:

GREAT FALLS, Mont. – The wheels of justice grind slowly, but this is pushing the envelope. In Montana's Toole County, retired District Judge Ronald McPhillips ruled this week in a lawsuit that was left hanging for nearly a quarter-century. The judge ruled in Great Falls against Milan Ayers, who contended that former partner James Rubow swindled him out of his share of a natural gas field, with leases potentially worth millions of dollars.

The lawsuit was filed March 31, 1983. The last entry in the clerk's register was in March 1985. Then the file disappeared from the clerk's office.

After the Great Falls Tribune wrote about it, McPhillips found the case documents.

"I think he found it in an old briefcase he had at home," said longtime administrative assistant Elda Nichols, who had worked for McPhillips before his retirement in 1994.

McPhillips brought the lawsuit and his notes to the court late last week, said Nichols, and District Judge Laurie McKinnon asked the Montana Supreme Court for guidance on how to proceed.

If the case is in good shape, let McPhillips rule on it, the judge was told.

On Monday, McPhillips ruled that Rubow did not breach his agreement with Ayers. The lawsuit was dismissed, and no damages were awarded.

"He had taken very good, very copious notes on the case, so it was good he was able to rule on it, and we were able to avoid a new hearing," Nichols said.

Ayers said he's uncertain whether he'll appeal.

New Rules of Professional Conduct

The Illinois Supreme Court has amended the Rules of Professional Conduct. The new rules take effect January 1, 2010.

See the Supreme Court's press release here.

Tips on the Oral Argument

Last night I was looking for some new cases to read up on, but instead I discovered a part of the Illinois Courts website that I didn’t notice before... the Oral Argument Audio Video Section. It’s interesting because you can definitely learn what to do and what not to do when presenting an oral argument. Personally, I welcome all sorts of public speaking opportunities (it’s partly why I chose to pursue this profession) I think its fun; and can undoubtedly create an opportunity to deliver a message in a way that was not there before.

So here are my educational tips to approaching the Oral Argument:
......pictures and videos included!

1. Be prepared!
The best thing you can do for yourself in an oral argument is to be prepared! If you know your argument, the cases which support it, and the order in which you will present your argument you have nothing to worry about!

Practical ways you can accomplish this:

Get organized! Figure out what you need and simply take what is necessary to the podium. I suggest your brief, a manila folder which neatly contains your presentation, Post-it-Notes, and a trusty pen (Post-it-Notes and Pens are not really necessary at the time of your presentation; rather they are useful to take notes as your opponent is speaking). ----Click for image----

Print your argument in short hand format (an outline), this will help you stay on track with your argument and in case you are forced to step out of your argument order you can quickly step right back in.
---Click for image---

List your cases, so if you need to cite them to the court it’s right in front of you. And if you need to refresh you memory on a case it’s also right in front of you! ---Click for image---

Lastly rehearse your argument ...in front of a mirror if you have to! The key is to just do it! You want to work the kinks out so you won’t work them out in front of the judges.


2. Look good feel good!
Make sure you dress professionally (see image at the top). Looking professional sets the tone not only for yourself but for those who are going to be listening to you. Avoid “flashy colors” (i.e. hot pink, lime green), unnecessary jewelry, and bothersome hairstyles. The last thing you want the court to be paying attention to is the choice of your attire, your blindingly reflective jewelry you refer to as “bling”, or the constant hand gestures moving your hair out of your face. Strike the balance between looking professional and feeling comfortable. Oh and if you have to ask, “Is this appropriate?” It’s probably not!


3. Respect
Respect the court and its procedure! Simply knowing these few points will increase your credibility and respect in the eyes of the courts and your peers.
Don’t approach the bench until asked to.
Begin with “May it please the court, my name is (your name here) and I represent the (party name and role in lawsuit).
Request time for rebuttal; NEVER assume your going to get time! (As a matter of fact in most courts if you don’t request it...YOU WAIVE IT!)
Briefly and concisely, introduce with out looking at your notes the following: (Yes that means memorize these!)
The issue and your clients stand (Make this great! You command the attention at this point.)
The reasons in which you will discuss why your client should prevail (Make eye contact)
The most relevant facts (Be brief because the court usually wants to skip passed these)
Now take a breath and begin your points in detail (You can look at your notes now, but don’t stare at them!)
When speaking, avoid unnecessary hand gestures, try keeping in front of you on the podium.
Lastly if a judge speaks you zip it! No matter what you are saying! (Its that respect thing again)

In an effort to show you what to do and what not to do I have written some points and illustrated them with video links from our very own Illinois courts Website. Unfortunately the videos are more than half an hour each so I only refer to the good and not so good that occurs in the first two minutes of each oral argument.



Video 1: Weather-Tite v. University of St. Francis
The good:
She waited until she was requested to approach the bench.
She dressed professionally
She was organized and had only what she needed at the podium
She began with the “may it please the court”
She had some good eye contact
She stops speaking when the judges begin speaking

The not so good:
She forgot to mention who she was?!
She began to get flustered, it would have been better if she memorized her introduction
She had to mover her hair behind her ear. (Not a huge deal...but try to prevent having to do that)
She was nervous...and it showed.


Video 2: Stern v. Wheaton-Warrenville Community Unit School District 200
The good:
He had a good introduction overall!
He dressed professionally

The not so good:
Really did you need all those papers?


Video 3: Turner v. Memorial Medical Center
The good:
He approached the podium when asked
Good classic opening sentence

The not so good:
Lack of eye contact
Unnecessary hand gestures
Really do you need all those papers and pens?


Video 4: Halpin v. Schultz
The good:
He approached when asked
He gave a good history of the case
He had his documents neatly organized and limited

The not so good:
There was no classic introductory sentence
You really don’t have to tell us who present in the court
Skip the metaphors....you lost us for a minute
There were unnecessary hand gestures
He did not have the codes handy: (see 2min 5 seconds)


Video 5: Beelman Trucking v. Workers' Compensation Commission
The good:
He dressed professionally
He spoke in a respective tone

The not so good:
He approached the podium before asked to
Really did you need all those papers and folders up there? (unorganized)
He did not begin with the classic sentence
There were unnecessary hand motions!
There was a lack of eye contact


Video 6: In re: Cutright
The good:
He dressed professionally.
He brought minimal papers to the podium.
He approached the podium when asked.
He used the classic introductory sentence.
He clearly stated his clients stand and the issues in a clearly spoken and concise manner.

The not so good:
He could have made better eye contact.
He nervously scratched his cheek...repeatedly.
He nervously played with his ring.



Lastly here is a young law student, Victoria Corder, who in my opinion does a pretty darn good job!--->Video



As always opinions & comments are welcome!

Motion to Fight Opposing Counsel

I just came across a great legal humor blog called Lowering the Bar that is written by Kevin Underhill, a partner in the San Francisco office of Shook, Hardy & Bacon. I spent at least an hour this weekend reading through the previous posts on the website. There is some really good stuff on there, but my favorite part of the blog is the Legal Document Archive. There are links to humorous judicial opinions, court orders, and pleadings.

My favorite pleading is the "Motion for Fist Fight" filed by Attorney Kirk Krutilla from Superior, Montana. This is an actual motion that was filed by Mr. Krutilla in a criminal case. Here is a link to the motion and the State's response.

It is not entirely clear what was happening in that case, but from what I understand, Mr. Krutilla represented a man who was charged with causing the death of another man during a fight. Mr. Krutilla's client was asserting self-defense. Apparently, the decedent was the aggressor in the fight, and Mr. Krutilla was upset that the State seemed to be sanctioning the actions of the decedent by prosecuting his client for defending himself. So, Mr. Krutilla filed a motion for a fist fight involving him and another lawyer from his office on one side, and two prosecutors on the other side.

The State's response is equally hilarious. They state that "the counsel for the State are confident they could acquit themselves respectably if it were necessary to settle any part of this matter by means of a physical contest," but, nonetheless, they respectfully request that the motion be denied.

ARDC Disqualifies 587 Lawyers

The ARDC disqualified 587 active attorneys from the state's master roll this year when they failed to file the paper work showing they had completed 20 hours of CLE training between July 1, 2006, and June 30, 2008. The lawyers were officially removed from the roll after being sent three reminder letters late last year.

As all of you hopefully already know, Illinois adopted new CLE rules and requirements in September 2005 and created the Minimum Continuing Legal Education Board to enforce compliance. Lawyers with last names in the first half of the alphabet were to meet the new 20-hour education standard by June 30, 2008 and those in the second half are required to complete their CLE credits by June 30 of this year.

The two-year study requirements will rise to 24 hours in the next cycle and eventually to 30 hours. There were about 2,000 lawyers out of compliance as of December, but the commission made phone calls to many of the lawyers to remind them about meeting the new CLE requirement. About 1,400 lawyers immediately came into compliance, but the remaining 587 did not. That number probably includes some lawyers who have moved, died or retired, said James Grogan, the adminstrator of the ARDC.

How do they get reinstated? Report compliance and pay a reinstatement fee of $250.00.

Will County documents available electronically

From this morning's Joliet Herald:

The circuit court clerk's office now has the ability to electronically send noncertified copies of documents from scanned images, pursuant to a court administrative order, Circuit Clerk Pamela McGuire announced.

"Our office believes this service is another way we serve the public's best interest. For those who utilize the courts, this ability can save a trip to the courthouse, fuel and parking," McGuire said. "The fees for the electronic documents are consistent with our normal paper copy fees pursuant to statute. In the very near future we hope to be able to process certified copy requests as well."

To obtain documents electronically, visit http://www.willcountycircuitcourt.com/, select E-Documents and follow the instructions.

Requests can be submitted 24 hours a day, seven days a week from the convenience of one's office or home. Upon confirmation of payment, the documents will be electronically sent in a portable document format. Payments can be made by credit or debit card on the site. All document requests will be processed during normal business hours.

"The office of the Will County circuit clerk continues to look for convenient ways through technology to serve the public and utilize the clerk's office," McGuire said. "We hope you find this new service useful and cost effective."

Defendant Tosses Excrement at Markham Courthouse Judge

From Friday's Chicago Tribune:

Murder wasn't the only thing most foul at the Markham Courthouse on Friday.

Cornell Tyler, 37, of Robbins was hauled away after he announced his name was "Self Destruction" and flung human excrement around the courtroom.The incident took place shortly after noon as Tyler appeared before Circuit Judge Kathleen Panozzo during a routine status hearing. He is charged in the 2005 slaying of Ghada Elayyan in Robbins.

"He was in the back prior to his appearance before the judge, and he was given some lunch and then used the bathroom and used one of the lunch baggies to store the excrement," said Penny Mateck, a spokeswoman for the Cook County sheriff's office.

Assistant State's Atty. Ted Lagerwall, who is handling Tyler's case, said the defendant appeared disheveled when he was led into the courtroom."The judge said, 'Is your name Cornell Tyler?' " Lagerwall said. "He said, 'My name is Self Destruction, but you can call me Smitty—well, I mean [expletive].'

"Tyler then quickly reached down the front of his pants and pulled out the baggie but the deputies beside him pounced on him."In that scuffle, he did throw the excrement toward the front of the courtroom," Mateck said. "The judge was not injured, but unfortunately our deputies were . . . adversely affected."After Tyler was removed, the judge finished the court call in a back hallway.

"The courtroom stunk to high heavens," Lagerwall said. Mateck said charges were expected to be filed next week.

Ya, that sounds about right.

This article from Law.com is not for the weak of heart. It is titled "Mid-Level Associates: The Paycheck Report." The first sentence says "Finally, everyone's being paid like a New York lawyer." Wait...what? Everyone?

The article goes on to explain how New York associates' salaries are leveling out while the rest of the country's associates' salaries are rising. A survey of nearly 7,500 associate attorneys showed that the average salary has climbed to $185,000 for third-years, $210,000 for fourth-years and $230,000 for fifth-years.

Wow. Have a nice weekend!

Illinois Supreme Court makes plans for statewide e-filing

In a press release dated May 23, 2008, the Illinois Supreme Court expressed its plan to electronically link all 23 judicial circuits through a single website. Litigants would then be able to e-file documents in any county through the one website. The Court hopes to have the website created in the next three to five years. Here is a brief article from Law.com.

E-filing in the federal courts is mandatory. I really like that system. It is so much easier than driving to Chicago, that's for sure. I've also found that certain courts will simply rule on routine motions without the movant ever having to appear. For instance, when a plaintiff files a motion to voluntarily dismiss a case, or something else very simple and unopposed, it is not uncommon to receive an emailed order granting relief shortly after e-filing the motion.

Does anyone see any problems with this proposed plan?

Making Your Case

The next book that I am going to read is called Making Your Case: The Art of Persuading Judges. It is a new book written by Justice Antonin Scalia and Bryan A. Garner. Clink here for Bryan A. Garner's website. He is the founder of LawProse, Inc. He looks like a really smart guy.

Anyway, the book contains specific and valuable advice on how to persuade judges through all stages of your case. It is divided into four main sections: General Principles of Argumentation; Legal Reasoning; Briefing; and Oral Argument. These sections are divided into 115 short paragraphs containing very specific pointers. For instance, chapter titles advise lawyers to "Occupy the Most Defensible Terrain," "Yield Indefensible Terrain," and "Appeal to Justice and Common Sense."

The Wall Street Journal Law Blog recently profiled a couple of good chapers. Yesterday's tip was to "improve your writing by improving your reading." Specifically, by reading literature other than legal opinions. The book quotes Judge Easterbrook of the 7th Circuit when he says that “the best way to become a good legal writer is to spend more time reading good prose. And legal prose ain’t that!"

I'm taking their advice, starting with their book. I'll let you know how it goes.

Lawyer Sentenced to 90 days for Contempt

It turns out that Adam "Bulletproof" Reposa is not so "bulletproof" after all. The oddly-nicknamed Texas criminal defense attorney was found to be in contempt of court for making an obscene hand gesture while making direct eye contact with the Judge. And it wasn't the one-fingered salute.

I'm not even going to describe it here. Please click here to find out what this idiot did.