Law Firms Fighting Over Contingency Spoils
To the victor go the spoils in contingency cases, to paraphrase a famous quote. But real life isn't always as simple and as the Minneapolis Star Tribune reports, lawyers sometimes find themselves fighting over division of the spoils rather than enjoying them.
The article focuses on an intra-firm fee dispute involving the Minneapolis law firm Heins, Mills & Olson. The Heins law firm received a $103 million fee for its work as lead counsel in a nationwide class action suit against AOL Time Warner over false and misleading financial statements by AOL. After the win, several partners left the firm and filed suit for a larger cut of the fee, arguing that Heins and other lawyers on the firm letterhead had retained a disproportionate cut of the winnings. Eventually, the two departing lawyers each received $4 million, while Heins received $48 million and his wife Stacey Mills, an equity partner, took $32 million. However, Heins and Mills didn't keep the entire award as profit, but used a portion to cover taxes and pay down a line of credit that had been used to keep the firm going while the case was in suit.
Presumably, the departing lawyers had done the bulk of the work on the case, but the name partners had fronted the costs and perhaps, helped lure the clients. In this situation, what do you consider a fair split?
Posted by Carolyn Elefant on May 20, 2008 at 05:04 PM | Permalink
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