When a major NYC law firm manages to run up $3.1 million in fees while "helping" a client recover a $4.68 million down payment on a condo, whilst billing more than 5500 billable hours - well, you know that the system is broken. Read it and weep here.
Here's a clue: lawyers should be in business to help their clients achieve sensible results to their real-world problems. When clients are spending stupid amounts of money to achieve these results, we have an obligation to let them know they may be wasting their funds.
This looks like one of those cases where the lawyers may have told the client "Don't worry; our fees are recoverable." As the court found in its opinion:
"[I]t appears that Sponsor has not actually paid any legal fees to [the firm] on this matter. Astonishingly, [the firm's] attorneys, paralegals, and staff amassed 5536.4 billable hours on this matter, employing four partners, three special counsel, ten associates, eight paralegals, and a summer associate. (See Declaration of [nameless lawyer], dated Aug. 23, 2012 . . . . . Partners billed their time at rates ranging from $6801hour to $1025Ihour; associates at rates ranging from $440/hour to $745/hour; paralegals at rates ranging from $250/hour to $295/hour; and, last but not least, a summer associate at $335/hour. [The firm's] total bill for legal fees is a breathtaking $3,164,828.00."
As Judge Pauley put it, "This Court doubts that Sponsor - or any other client-would pay over $3.3 million in fees and expenses for the mere possibility of securing a $4.68 million down payment."
Don't get me wrong - the firm involved here is a well-known, high-quality, top-tier firm that is capable of providing great legal work for its clients. But at some point the Rule of Reason needs to intervene. And what this means from a practical perspective is that the Big Name Law Firm is not always your best choice for a good result at a good price.
12 hours ago