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Lawyers' Fees Kept Secret -- From Clients

Walter Olson at the blog Overlawyered points to this story out of New Orleans in Friday's The Times-Picayune, Judge Seals Records on Legal Fees in Suit:

"The judge in a 2004 federal class action lawsuit over fuel gauge damage caused by tainted gasoline made at Shell-Motiva refinery in Norco has sealed records on how he divided $6.8 million in legal fees among 79 lawyers in the case.

"U.S. District Judge Ivan Lemelle has ordered each lawyer, on pain of being sanctioned, not to reveal how much they were paid."

That means that not even the plaintiffs who were members of the class get to find out how much their lawyers earned in fees. And that irks Loyola University College of Law ethics professor Dane S. Ciolino, who tells the newspaper that Lemelle's order violates not only the public's right of access to court records but also legal-ethics rules that say a client is entitled to know how his lawyer shares fees with other lawyers. Ciolino has asked the judge to lift the seal.

He is not the only one unhappy with the order. Except for the five lawyers on the committee who drew up the disbursement plan, even other class counsel do not know how the legal fees were divvied up. One, Stephen Murray of New Orleans, believes his firm should have been paid more than the $33,000 it received for its 125 hours on the case. (That works out to $264 an hour, by the way.) Murray contends the judge has deprived him of his due process right to challenge the fee determination.

Meanwhile, Ciolino says all this "suggests to the public at large that lawyers in high-profile, class action cases have something to hide." But one member of the fee committee, Don Barrett of Lexington, Miss., says there is good reason to keep the fees confidential -- to forestall fee fights that might erupt if each lawyer could compare notes. By that logic, just think how much happier we'd be if courts and governments simply sealed all records.

Posted by Robert J. Ambrogi on April 9, 2007 at 04:42 PM | Permalink | Comments (0)

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