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May 31, 2003

Is a Legal Fee Ever Too Big?

Filed under: pre-06-2006 — David Giacalone @ 11:11 pm

NYS Justice Charles E. Ramos suggested last year that 625 million dollars (about $13,000 per hour) might be an excessive fee for the six law firms that helped settle the State’s case against the tobacco industry. covered this surprising act of judicial bravery last July. The case was in the news again this week, as reported in the New York Law Journal and on May 28th (free, with a cumbersome registration). On Tuesday, a panel of appellate judges heard arguments, in the case of State of New York v. Philip Morris, as to whether Justice Ramos even has the power to raise the issue of unreasonable fees, especially at this time.

In a world where the ethical ban against excessive contingency fees is almost never enforced by ethics boards or judges (per Cardozo Law Prof. Lester Brickman), this could be a momumental case. But, I’m not getting my hopes up. Nobody in the case supported Justice Ramos, and he had to appoint his own Independent Counsel to defend his position. Even the normally toughminded and consumer-friendly Attorney General, Eliot Spitzer (featured on Sixty Minutes last Sunday for battling Wall Street ripoffs), opposed Justice Ramos strenuously.  Let’s face it, there are immensely powerful interests who want Justice Ramos put in his place.  If the NY 1st Department Appellate Court wants to overturn Justice Ramos, the facts present many procedural reasons that could be used.

Usually, it’s the “little guy’s” legal fees that bother me, not fees awarded to lawyers for sophisticated clients like New York State. This case interests me, however, because the real clients are the residents of the State. Even more important, if $13,000 per hour isn’t enough to warrant a close judicial look or review by an ethics board (long before it got to Justice Ramos), I have to wonder why the legal profession even has a ban on excessive fees. Why not just limit the rule to actually stealing your client’s money or intentionally padding a bill?

  • Two Cents from (the Editor’s alter ego) Jack Cliente: What I wonder is where the elite consumer-lovers are when it comes to preventing scandalously high lawyer fees, which come out of the victims’ hides one way or the other.  Why wasn’t the Ramos story important enough for the New York Times to cover this week?  Have campaign contributions to Democratic politicians, and large donations to liberal nonprofit organizations, neutered all of the consumers’ watchdogs?

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