The Recorder digs up this lawsuit by McAfee against WilmerHale for "fraud, theft, negligence and breach of fiduciary duty" for billing $12 million to defend their Chief Financial Officer in his accounting fraud case (he was convicted).
Here’s the claim:
"[WilmerHale] intentionally overworked and churned the representation of Goyal; shamelessly employing over 100 WilmerHale timekeepers in the feeding frenzy," McAfee alleged in a complaint filed in the Eastern District of Texas earlier this year. "Defendant’s bills reflect at least 16 partners, 34 associate attorneys, 10 legal assistants and 49 staff personnel — how else could they amass this enormous trove of cash?" the complaint read.
Martin Rose, the Dallas lawyer representing McAfee in the fee dispute, alleges in his latest complaint that WilmerHale, which brought in East Coast lawyers to represent Goyal in a San Francisco trial, charged almost $200,000 in expenses for luxury hotel rooms, limousines and charges for room service and bar tabs. The software company described WilmerHale as "unrepentant in its greed."
And the response:
Paul Yetter, the Houston lawyer representing WilmerHale in the fee dispute, said by e-mail Monday that "over 80 percent of the defense work was done by two lead WilmerHale partners and a handful of associates. The bulk of other timekeepers were needed for review of 1.2 million documents in the case."
He stated that the fees were in line with similar cases, including the backdating trial of Brocade Communications CEO Gregory Reyes.
Yetter, of Yetter, Warden & Coleman, also provided a statement from WilmerHale that said its fees "reflect legal services that were necessary and reasonable in a lengthy and complex matter encompassing five separate cases, particularly one in which Mr. Goyal’s very liberty is at stake. Indeed, the California judge commended the firm’s efforts as ‘extremely well-tried.’"
Initially, the above truly is "in line with similar cases." The pro bono defense of former Illinois Governor George Ryan was estimated to have been worth $10 million in fees, with another $10 million in lost business.
More importantly, what, exactly, did McAfee expect from WilmerHale? Did they come to WilmerHale and say, "now, we know that, on average, your lawyers bring in over $900,000 in revenue every year, but we’re hoping you can run this white collar case the way a small firm would, with, you know, a big emphasis on productivity and perhaps outsourcing review of the bulk of the 1.2 million documents to law students and paralegals?"
Or did they pass over dozens of former judges, former prosecutors, experienced trial lawyers, and leaders of the bar in solo, small and mid-sized firms to run to a gigantic corporate empire begging they spare no expense, leave no stone unturned, and dedicate their most expensive partners and associates to the case full time?
I have my suspicions. Maybe this can be a lesson to general counsels everywhere: if you demand big, you’ll be billed big.