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Category: Fees & Privilege / Confidentaility

Former AG’s Hourly Rate: $2,295

April 16, 2021

A recent Law.com story by Mike Scarcella, “Covington’s Eric Holder Bills at $2.295 Hourly, New Legal Services Contract Shows,” reports that Covington & Burling partner Eric Holder Jr., the Obama administration’s first U.S. attorney general and a veteran Washington lawyer, is billing at $2,295 hourly, according to a contract the law firm signed with a public university to conduct an internal investigation about workplace culture.  Holder is Covington’s lead partner on the legal services engagement with Oregon Health & Science University.  The school announced its retention of Covington in late March to lead a “comprehensive, independent investigation of institutional harassment, discrimination, retaliation and racism.”

Covington and other firms have long been hired to conduct internal investigations at companies and other institutions, but in many instances the engagement letters, revealing rates and the scope of legal services, are not matters of public record.  ALM obtained Covington’s contract through a public records request.  Holder’s $2,295 billing rate puts him at the high end of hourly figures.  Billing at other elite firms such as Weil, Gotshal Manges and Kirkland & Ellis have recently approached $2,000.

“Mr. Holder and Covington have conducted examinations of workplace culture and issues related to equity, diversity and inclusion for corporations including Uber, Starbucks and Airbnb,” the university said in announcing the retention of the Washington-based law firm.  The announcement noted that “Holder and the Covington team are also currently assessing race, equity, inclusion and diversity policies and practices at Seattle Children’s Hospital.”

Holder is working with Covington partner Nancy Kestenbaum, co-chair of the firm’s white-collar defense and investigations practice group and a former member of the firm’s management committee. Kestenbaum is billing at $1,445 an hour, the law firm’s engagement letter said.  Covington said it agreed to discount its rates by 10%.

“Hourly rates for other lawyers range from $595 for junior associates to $2,295 for senior partners; and for legal assistants from $290 to $545,” the firm said in its engagement letter.  The firm said it reviews and adjusts rates yearly as of Jan. 1, “although there are circumstances in which we may adjust rates at other times.”  Part of the contract contained information that the university would not release.  The information pertained to clients Covington is advising on clinical trials being conducted at the university.

“As you recognize, we are a large law firm with multiple practices in multiple offices throughout the world, and we represent many different clients in many different industries, including clients who are competitors of each other and sometimes adversaries in legal matters,” Holder wrote.  “In taking on this representation, we commit that we will not represent any other client in any matter adverse to you that is substantially related to this matter.”

A private law firm charging a public client is not rare.  Public records show major U.S. law firms have charged local or state government clients to take a case to the U.S. Supreme Court.  Not every engagement, however, is charged. Some work is done pro bono.

Nelson Mullins Discloses Hourly Rates in Patent Fee Request

March 1, 2021

A recent Law.com story by Mike Scarcella, “Denied a Seal, Nelson Mullins Reveals Rates in Fee Petition in Patent Suit,” reports that, for at least the second time in the span of a year a federal trial judge refused to let a major U.S. law firm keep hourly rates and other billing-related information secret as part of an effort in court to squeeze legal fees from an opponent.

Denied its bid for secrecy, one of the firms, Nelson Mullins Riley & Scarborough, last week resubmitted its attorney fee petition fully unredacted in the U.S. District Court for the Western District of North Carolina.  The other firm, King & Spalding, abandoned an effort last year in Washington’s federal trial court after a judge said he would unseal supporting records showing hourly rates if the firm wanted to press its fee request.

Nelson Mullins sought $292,340 from a private plaintiff who filed patent claims against the motorsports company Simpson Performance Products and an engineer there.  The law firm won a key ruling in early February, but the court, just one day after the fee petition was filed, denied the request.  King & Spalding had sought $665,000 from the U.S. Department of Health and Human Services after successfully obtaining records in a federal Freedom of Information Act lawsuit.

Specific hourly billing rates and other internal records about fees generally are not things that law firms and lawyers are eager to discuss out in the open.  Indeed, both Nelson Mullins and King & Spalding had argued hourly rates and other billing documents were sensitive business records that should be kept confidential.  Still, information about billing often becomes public as a matter of routine in any number of settings, including in bankruptcy filings, certain types of litigation and in some law firm contracts with government clients.

A bankruptcy case in the U.S. District Court for the Northern District of Texas recently showed hourly rates for Kirkland & Ellis partners to be between $1,085 and $1,895, and associates’ hourly rates between $625 and $1,195.  In California, a federal judge last month ordered legal fees to be paid to a team from Gibson, Dunn & Crutcher that successfully represented Rachel Maddow as a defendant in a defamation case.  Gibson Dunn partner Theodore Boutrous Jr., prominent for his First Amendment advocacy, was shown as billing $1,525 hourly last year.

Nelson Mullins “asks the court to seal the amount of attorneys’ fees being requested—the very substance of the relief that it is seeking from the court—along with how it calculated the fees (counsel’s hourly rates and the time expended during their representation),” U.S. District Judge Kenneth Bell wrote in a Feb. 24 order.  “Thus, the effect of a request to seal this information is tantamount to a request to issue a secret order, as the court could not even grant much less fully discuss the merits of [the legal fee] request without disclosing the amount of fees requested along with counsel’s hourly fees, etc.”

In the King & Spalding matter, U.S. District Judge Amit Mehta said “the records that plaintiff asks to keep under seal go to the very heart of what is before the court: questions concerning the reasonableness of plaintiff’s counsel’s hourly rates and the reasonableness of the time they expended on this matter.”

Both judges declined the invitation to seal the law firms’ hourly rates and other records.  In the case involving King & Spalding, the firm dropped its move to get fees after Mehta said he would unseal rate information if the firm moved forward.  Those details remained sealed.  “Once a matter is brought before a court for resolution, it is no longer solely the parties’ case, but also the public’s case,” wrote Bell, a former McGuireWoods partner who’d spent more than 10 years in the firm’s Charlotte office before joining the bench in 2019.

Bell said that “except in very limited circumstances, the court’s business must be conducted openly, with public access guaranteed to instill confidence in the fairness of the proceedings and inform the public about the law.” He added: “[B]y choosing to seek attorneys’ fees in an open court, Simpson must necessarily disclose the amount of the award it seeks and the underlying basis for its fees.”  To “avoid any surprise,” Bell said he would allow Nelson Mullins to withdraw its motion for legal fees or refile it in an unredacted form.  That firm submitted 85 pages of arguments, declarations and billing records to back its request for fees.

“The rates charged by defendants’ counsel were well within, if not below, the range typically charged for complex litigation in North Carolina,” wrote Charlotte-based Nelson Mullins partner Craig Killen, who said he billed at $425 hourly for the case.  Another partner, Robert McWilliams, billed at $405 on the case.  Three associates billed at hourly rates between $320 and $345, according to the law firm’s motion for fees.

In arguing for fees, the Nelson Mullins team trumpeted the “unusual questions” raised during the patent litigation.  “This case was pending over two years and proceeded through the extended period of discovery,” Killen wrote in a court filing.  Nelson Mullins said its request for fees “is made with some reluctance because Simpson has no interest in ‘punishing’ an individual plaintiff.”  But, the law firm said in its court filing, “much of the expense incurred by the defense could have been avoided if plaintiff had not pressed unreasonable and objectively baseless positions.”

On the day after refusing to allow Nelson Mullins to file its billing records under seal, Bell, the trial judge, rejected the firm’s request.  “In the exercise of its discretion, the court does not find this case to be exceptional,” Bell wrote in an order last week.  “While the court determined that defendants were fully entitled to summary judgment (and to be clear does not intend by this decision to indicate that it has any uncertainty over that conclusion), defendants have not shown that plaintiff pursued her claims frivolously, for an improper purpose or in bad faith.”

Utah Sues Insurer Over Coverage of Defense Fees

February 4, 2021

A recent Law 360 story by Daphne Zhang “Utah Asks Insurer To Pay $1.8M Atty Fee in Trade Secrets Suit”, reports that Utah's Department of Administrative Services sued an AIG subsidiary, seeking to compel the carrier to cover the $1.8 million it spent defending Utah State University in an underlying trade secrets suit.  The department told a Utah federal judge that Lexington Insurance Co. breached the insurance contract by refusing to reimburse its legal bills incurred in defending Utah State University Research Foundation against global weather analytics company GeoMetWatch in the underlying suit.

According to the suit, AIG has asserted that the fee incurred by the Utah Attorney General's Office from defending the university in the underlying litigation is defined as "employees salary" under its policy and contended that it will not pay for the state's defense costs.  Utah and its state administrative department said AIG has denied coverage for the underlying defense costs without any written explanation.  The Beehive State is alleging breach of contract and breach of good faith and fair dealing, and asking the court to hold that AIG should cover it in the underlying litigation and pay damages.

The department said its risk management division insures the state of Utah and its agencies for property and personal injury up to $1 million.  The state also held an excess liability policy from Lexington that covers loss once the $1 million primary policy is exhausted.

In March 2018, the division notified AIG that it had incurred over $1.195 million of legal bills in the underlying action and requested reimbursement under the policy.  The federal claims in the underlying case are currently pending in the Tenth Circuit and state claims are pending in Utah state court.  As of the filing of the suit, Utah has incurred over $1.8 million in attorney fees, according to the complaint.

AIG then requested documentation of attorney fees.  The underlying case was under a protective order, requiring the AIG staff to sign a non-disclosure agreement before reviewing the documents.  In November 2018, one of the attorneys representing Utah State University sent AIG the requested documents and reminded AIG to sign the agreement to comply with the protective order.  In May 2019, the division asked AIG to respond to its defense cost claim and made the request again a month later.  In April, the director of the division wrote to AIG regarding its alleged failure to pay the defense costs in the underlying litigation.

The Nation’s Top Attorney Fee Experts of 2020

June 24, 2020

NALFA, a non-profit group, is building a worldwide network of attorney fee expertise. Our network includes members, faculty, and fellows with expertise on the reasonableness of attorney fees.  We help organize and recognize qualified attorney fee experts from across the U.S. and around the globe.  Our attorney fee experts also include court adjuncts such as bankruptcy fee examiners, special fee masters, and fee dispute neutrals.

Every year, we announce the nation's top attorney fee experts.  Attorney fee experts are retained by fee-seeking or fee-challenging parties in litigation to independently prove reasonable attorney fees and expenses in court or arbitration.  The following NALFA profile quotes are based on bio, CV, case summaries and case materials submitted to and verified by us.  Here are the nation's top attorney fee experts of 2020:

"The Nation's Top Attorney Fee Expert"
John D. O'Connor
O'Connor & Associates
San Francisco, CA
 
"Over 30 Years of Legal Fee Audit Expertise"
Andre E. Jardini
KPC Legal Audit Services, Inc.
Glendale, CA

"The Nation's Top Bankruptcy Fee Examiner"
Robert M. Fishman
Cozen O'Connor
Chicago, IL

"Widely Respected as an Attorney Fee Expert"
Elise S. Frejka
Frejka PLLC
New York, NY
 
"Experienced on Analyzing Fees, Billing Entries for Fee Awards"
Robert L. Kaufman
Woodruff Spradlin & Smart
Costa Mesa, CA

"Highly Skilled on a Range of Fee and Billing Issues"
Daniel M. White
White Amundson APC
San Diego, CA
 
"Extensive Expertise on Attorney Fee Matters in Common Fund Litigation"
Craig W. Smith
Robbins LLP
San Diego, CA
 
"Highly Experienced in Dealing with Fee Issues Arising in Complex Litigation"
Marc M. Seltzer
Susman Godfrey LLP
Los Angeles, CA

"Total Mastery in Resolving Complex Attorney Fee Disputes"
Peter K. Rosen
JAMS
Los Angeles, CA
 
"Understands Fees, Funding, and Billing Issues in Cross Border Matters"
Glenn Newberry
Eversheds Sutherland
London, UK
 
"Solid Expertise with Fee and Billing Matters in Complex Litigation"
Bruce C. Fox
Obermayer Rebmann LLP
Pittsburgh, PA
 
"Excellent on Attorney Fee Issues in Florida"
Debra L. Feit
Stratford Law Group LLC
Fort Lauderdale, FL
 
"Nation's Top Scholar on Attorney Fees in Class Actions"
Brian T. Fitzpatrick
Vanderbilt Law School
Nashville, TN
 
"Great Leader in Analyzing Legal Bills for Insurers"
Richard Zujac
Liberty Mutual Insurance
Philadelphia, PA