Hey, does your firm still pay for that courthouse news roundup of new filings?

Mine stopped, plus we fired 4 attorneys and 32 staffers, but let me tell you -- the Gevalia coffee is still delicious!

Anyway, I just came across this one from the Tampa area, forwarded by a dedicated reader:

Professional negligence and breach of fiduciary duty action claiming the defendants failed to settle an auto negligence claim against the plaintiff within the amount of available insurance coverage, resulting in a lawsuit with a verdict of $26 million. At the time of the crash, the opposing party's insurance counsel was also employed by the defendant, GrayRobinson, resulting in a conflict of interest and breach of lawyer-client confidentiality in regards to the plaintiff's case. The plaintiff was advised to sign a purported assignment, as the defendants knowingly withheld knowledge of the assignment of the insurer subrogation rights. The assignment improperly placed the interests of the defendants ahead of the plaintiff.

Sheesh, people make such a big deal about conflicts nowadays!

And I really enjoyed this Alana Roberts story about litigation fees and how clients and firms are dealing with them. I liked this quote:

Clients also are taking a closer look at the cost-alternative dispute resolution such as arbitration and mediation, said Miami litigator Jose Astigarraga, chairman of Miami-based Astigarraga Davis and co-chair of the event.

Mediation I understand and agree with. But arbitration, Jose? Really? I know that's been your thing, but come on.

In fact I would argue the trend is the opposite -- more businesses with arbitration clauses are foregoing mandatory arbitration to litigate their claims in court, where they don't have to pay three arbitrators $600 an hour to preside over the same discovery disputes that the taxpayers pay our judges to worry about.

Also, Marty Steinberg says move along, there's nothing to see here:

But litigator Marty Steinberg, managing partner of Hunton & Williams’ Miami office, said alternatives to the billable hour model haven’t caught on.

“There are all kinds of arrangements that have been tried; none of them have replaced the hourly rate,” he said. “I generally think clients that are satisfied with the service at the end of the day are fairly satisfied with the fees.”

Steinberg said he sees more clients pushing for budgets that offer detailed estimates of potential costs of litigation and are basing their decisions on those estimates.

“Clients now are insisting on budgets that identify each of the steps and estimate the cost of each step,” he said.

None have caught on, or none have caught on...at Hunton & Williams?

And everybody, raise your hands if you've ever done a litigation budget for a heavily-litigated case that has proceeded as budgeted.

And yet we still do them.....

As I mentioned the other day, judges are frequently clueless about how much money it takes to litigate a case. The issue often arises when they are asked to approve counsel fees, and fail to inquire of opposing counsel how much they spent to litigate the exact same case.

Further proof is demonstrated by these preposterous comments from the Supreme Court during oral argument on whether enhancements are appropriate in a statutory fee-shifting case:

“Seven hundred thousand dollars for a lawyer. Wow!” Justice Stephen Breyer said, referring to the amount one lawyer could make for a year’s work on the Georgia litigation. “How do we explain this to the average person?”

Breyer said, “Very high is enough” when it comes to lawyer fees. “You don’t need very, very, very, high.”

Judge Breyer is a smart man and did not just fall off the turnip truck. Yet he appears shocked -- shocked -- that you can burn through $700k in a year on a closely-contested piece of federal civil litigation.

Judges, take a look at your docket -- every one of your civil cases of any significance at all has lawyers spending more than that in a year. If you call Marty Steinberg in for a discovery hearing you have just cost his client $5k minimum before it's done. A summary judgment motion can easily run $50k or more (not including all the pre-motion discovery and Westlaw fees). Abbey Kaplan claims to review every document personally in his cases -- do you think this comes cheap? (btw I like the new website!)

What exactly do you think we're doing out here?

Now let's talk federal judges.

I don't want to get all Peter Fay about it, but when Tom Scott took his dogs and bolted from the bench way back when to earn a lot more money doing insurance defense, he started a trend. Just the other day, Judge Stephen Larson of the Central District of California left for private practice, and Chief Judge Collins explains why in this excellent editorial:

This court, which serves more people than any other federal trial court in the country, faces a crisis of retention, arising from stagnating judicial compensation and ever increasing caseloads. Since 1998, eight of our judges have resigned or retired. Five joined JAMS, a private alternative dispute resolution provider, where neutrals can earn the equivalent of our annual salary in a matter of months. Two became state judges, with higher salaries and better health benefits.

Judicial salaries haven't kept pace with inflation

A May 2003 report urged Congress and the president to provide for immediate pay relief, noting that during the previous three decades, federal judges' salaries declined in value, while the average American worker's salary increased by 17.5 percent. This erosion in judicial pay deprives judges of the prospect of salary stability during their tenure, while other federal employees receive cost-of-living increases to keep pace with inflation.

While all federal judges are affected, we have been particularly hard-hit, given the high cost of living in California and higher than average (and rapidly increasing) caseload. We led the nation in the number of mega-criminal cases filed in fiscal year 2008, with 25 such cases — including one with more than 70 indicted defendants. We expect this number to rise again in fiscal year 2009.

The Southern District of Florida is in a similar situation, with a heavy criminal docket, vacancies on the court, and situated in a place with a high cost of living. Let's face it -- judicial pay sucks.

Meanwhile in DC Congress has been conducting hearings on the Federal Judgeship Act. As Senator Leahy pointed out in a letter to the WSJ yesterday (corrected link thanks to Glenn Sugameli, staff attorney for Judging the Environment, who wrote two great letters on this), things are slightly different this year:

The Federal Judgeship Act incorporates the recommendations of the nonpartisan Judicial Conference, led by Chief Justice John Roberts. Just as I have sponsored bipartisan bills incorporating the Judicial Conference's recommendations during the past eight years, I have done so again this year. The difference this year is that no Senate Republican is cosponsoring the effort. They have all apparently had a change of heart now that we have a Democratic President.

The WSJ predictably calls Senator Leahy's efforts to get more federal judges on the bench a "court-packing scheme."

Just as predictably, President Obama is moving too slow and cautiously on appointing judges:

During his first nine months in office, Obama has won confirmation in the Democratic-controlled Senate for just three of his 23 nominations for federal judgeships, largely because Republicans have used anonymous holds and filibuster threats to slow the proceedings to a crawl.

But some Democrats attribute that GOP success partly to the administration's reluctance to fight, arguing that Obama's emphasis on easing partisan rancor over judgeships has backfired and only emboldened Senate Republicans.

Some Republicans contend that the White House has hurt itself by its slow pace in sending over nominations for Senate consideration. President George W. Bush sent 95 names to the Senate in the same period that Obama has forwarded 23.

This is ridiculous. The time is now, be the change, yada yada yada.

Once we have more judges and they are paid better, maybe we won't see shock at the Supreme Court over a seven hundred thousand dollar legal bill.

Legal bills remind me of the old Groucho Marx quip to the great New Yorker essayist S.J. Perelman --

"From the moment I picked up your book until I put it down, I was convulsed with laughter. Some day I intend reading it."

But it's true -- I think many judges and certainly clients often don't realize how expensive litigation is nowadays.

There's a lot to consider in Vanessa Blum's annual South Florida lawyer compensation survey, though as usual the methodology is flawed because the review is of fee submissions to courts in bankruptcy and from Florida government agencies who have retained private counsel, where fees are usually adjusted downward.

Still, as anyone who does this for a living knows, it costs an awful lot to litigate a case.

Consider Marcos (corrected!) Jimenez, who in a year racked up $700k in fees on behalf of the State of Florida in a valiant but unsuccessful effort to defeat class certification in the children's access-to-medical-care suit pending before Judge Jordan.

His team also handled a bunch of discovery and worked up and lost an sj motion.

(And this was at a discounted rate).

Or my pal Marty Steinberg, who -- seriously -- said his firm raises rates like clockwork every April Fool's Day.

Marty also told Vanessa he is worth every cent of his $695 an hour rate:

Hunton & Williams partner Marty Steinberg, who heads the receivership, said firm billing rates are determined centrally. Increases typically kick in April 1. Steinberg’s hourly rate was $695.

“I assume the firm thinks I’m worth that amount based on my track record,” he said. “I’ve tried hundreds of cases, and I’ve gotten pretty good results.”

This is actually true.

But let's not linger on fees. As Betty observed last night on Mad Men -- it's tawdry.

So go hail the conquering explorer Gerard Depardieu, have some fun on the bay with a bunch of drunken sailors, and see you all tomorrow!

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