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3.1 Million Reasons Not to Trust Your Attorney

September 19, 2012

As reported in the New York Law Journal’s “Judge Slashes Kramer Levin’s ‘Breathtaking’ Request for Fees“, pure greed is alive and well in the Big Apple.  Kramer Levin represented the prevailing defendant in a case involving a down payment on a luxury apartment co-op.  Under the contract, the prevailing party was entitled to reasonable attorney’s fees.  The apparently Most Inefficient Law Firm (a legal “MILF”) in the world submitted a fee request for over $3.1 million in fees and $177K in expenses, “including roughly $75,000 in Westlaw research charges for pedestrian legal issues arising from the breach of a real estate contract.”  The judge “only” allowed $475,000 in legal fees and expenses. Some of the gory details:

“Astonishingly, Kramer Levin attorneys, paralegals, and staff amassed 5536.4 billable hours on the matter, employing four partners, three special counsel, ten associates, eight paralegals and a summer associate,” he said, with partners billing in a range of $680 per hour to $1025 per hour, associates from $440 per hour to $745 per hour, paralegals from $250 per hour to $295 per hour, and “last but not least,” a summer associate for $335 per hour.

In support of their request, Kramer Levin cited authority for the prospect that “the negotiation and payment of fees by sophisticated clients are solid evidence of their reasonableness in the market.” Too bad for Kramer Levin that the judge found that “nothing in the record suggests that Kramer Levin even sent [the client] a bill or that [the client] paid any legal fees in connection with the case.”

What is most disturbing to me about this case is the inexplicable deference the federal judge paid to the unrepentant Kramer Levin:

Southern District Judge William Pauley said he had conducted a “mind-numbing review” of Kramer Levin’s billing records … but declined “to recapitulate that review” in his opinion to “avoid undue embarrassment to a fine law firm like Kramer Levin” in his opinion.

What Judge Pauley should have done was published each and every detail of this fraudulent billing abuse and reported the responsible attorneys to the state bar for appropriate disciplinary proceedings.  I guess I’ll have to respectfully disagree with Judge Pauley on the issue of Kramer Levin’s “fine-ness”: what you call “breathtaking,” I call “billing fraud.”  Allowing such intentional misconduct does a great disservice to clients, honest attorneys and the courts.

2 Comments leave one →
  1. September 20, 2012 12:14 pm

    I agree that it would be great if we actually had a full opinion on all of the objectionable billing practices Kramer Levin apparently engaged in in this case. Why do you think the judge declined to do so in this case, stating “The Court has conducted a thorough and mind-numbing review of Kramer Levin’s billing records. To avoid undue embarrassment to a fine law firm like Kramer Levin, this Court declines to recapitulate that review in this opinion.”? Do you think there is a general consensus that ethical violations with regards to billing practices are not as serious as other ethical violations?

    [Posted on LinkedIn “Controlling Legal Costs” http://linkd.in/STZxOI%5D

    • September 20, 2012 12:16 pm

      Judge Pauley further wrote: “Suffice it to note that it is highly unlikely that anyone at Kramer Levin actually reviewed the time records before hitting the print button and compiling them as exhibits…such a review would have uncovered, among other things, several problematic entries.”

      Unfortunately, this sounds like “the good ol’ boys club.” Can a federal judge be this naive? Kramer Levin clearly and obviously got caught with their hands in the cookie jar. and still walked away with almost half-a-million dollars. The problem with this thinking is that it encourages massive fee inflation, counting on the reduced amount be higher than the amount that should have been expended. This was supposedly a simple contract action (albeit high dollar). Perhaps, plaintiff’s counsel has Kramer Levin’s fee request papers?

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