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California Court of Appeal Snatches $5M in Fees From 3 Big Firms

March 9, 2010 | Posted in : Billing Practices, Defense Fees / Costs, Fee Award, Fee Issues on Appeal, Fee Reduction, Litigation Management

A recent article, “Court Tosses Fee Award, Saying Trustee Overpaid for Rolls Royce Defense” reported that a California appeals court has snatched away $5 million in fees from attorneys at three top law firms.  The 4th District Court of Appeal ruled that the trail court erroneously “rubber stamped” the fee award from attorneys at Loeb & Loeb, Jones Day, and Greenberg Traurig.  The three-judge panel said that the firms’ client, Patrick Donahue, had embarked on a “spare no expense strategy” by hiring three firms at once.  The panel ruled that although the client’s strategy may have benefited him, it was questionable whether it benefitted the Donahue trust.

Regarding attorney fees that the firms amassed in defending Patrick Donahue, the appeals panel appeared skeptical. “[S]imultaneous representation by multiple law firms posed substantial risks of task padding, over-conferencing, attorney stacking and excessive research,” the panel wrote.  The judges noted that one Jones Day associate alone billed $1.5 million.  Richard Bridgford, who represented Michelle Donahue at trial, said that the defense fees were excessive.  “I’ve never understood how it benefited the trust to have three law firms representing the former trustee against my firm,” said Bridgford.