Melange of Interesting Off Topics in the News All Center on Attorney’s Fees.
“In law, nothing is certain but the expense.”
–Samuel Butler
Samuel Butler put it well; here are three interesting vignettes for news stories that all center on attorney’s fees issues.
CA School District Struggles to Pay Adverse Title IX Fees Award
The Ramona school district finds itself struggling to pay almost $325,000 in attorney’s fees awarded in a Title IX suit brought by high school softball parents suing because the girl softball facilities were inferior to those for the boys. A judge ordered the district to construct a new softball field for the girls, with the district complying through an expenditure of $200,000 to upgrade the girl softball facilities. Although the district’s fees spend in the defending the suit were covered by insurance, the insurance policy does not cover fees awarded to the Title IX winners. The school district is scrambling to come up with a payment plan in light of $7.2 million in cuts expected over the next 18 months because of the state budgetary crisis. (See Brent Schrotenboer, “Legal fees from losing Title IX suit prove costly,” January 28, 2009 San Diego Union-Tribune.)
Illinois Governor Blagojevich Uses Campaign Funds to Fund Defense
Recent campaign disclosures for embattled Illinois Governor Rod Blagojevich show that he paid about $1,350,000 to two Chicago law firms for his defense of federal criminal corruption charges at various times in 2008. Looks like these expenditures are in a gray area, although New York and New Jersey have pending bills to stop public officials charged with crimes from using campaign contributions for legal defense purposes. There is, however, a dilemma to using campaign contributions—they may be taxed as income to the public official using them. (See Lynne Marek, “Can Blagojevich use campaign contributions for his legal defense?,” January 30, 2009 The National Law Journal.)
Billable Hour Arrangements May Be Caving To Other Alternatives
It appears that the economy may be leading to a more sudden revamp of attorneys who are wed to the billable hour. (We explored this topic earlier in our January 7, 2009 post.) Big law firms are worried about budgets, especially given that transactional deals are drying up and with only bankruptcy/economy-driven litigation keeping firms afloat. Heller Ehrman and Thelen (two big law firms) are gone, and MoFo just laid off over 150 lawyers. Given this constriction, some anecdotal evidence suggests that there may be a shift away from purely billable hour billings—firms are beginning to implement flat fee billings for deals, “success fees” (enhancement arrangements) for positive or speedier outcomes, or benchmark payment arrangements. (See Jonathan D. Glater, “Billable Hours Giving Ground At Law Firms,” January 29, 2009 The New York Times.)