Assuming an average billing rate of $500, this is about 24,000 hours, i.e., the equivalent of 6 attorneys dedicating two years to the case. This doesn't seem unreasonable.

I don't know the details but I would like to know what the actual total bill was. 12 million for the case doesn't seem unreasonable, but aren't they claiming 12 million over charge? That could put it more in perspective.

I don't use anti-virus software.

Another statistic. This is about $10 per document produced and reviewed ("WilmerHale noted that the case required the production and review of 1.2 million documents."). We have to assume some of the documents were more than a page long, but even if they were all one page e-mails, $10 will get you about 2 to 3 minutes of a junior associate's time. That's would be 2-3 minutes for each document if that is all the case involved. Of course, a lot of time is not for doc review, but even if every minute were for doc review, this seems reasonable.

McAfee sucks, no wonder they are trying to recuperate some money by these falsehoods.

The complaints re: the hotels really burn my ass. I want to know what counts as a "luxury hotel." Clients can't expect lawyers to leave home and live in a dump during a trial. Billing rates reflect the cost of our time in our home offices; do they think lawyers miss their kids' softball games and their own homes for free on top of that?

Don't know much about the client, except they were the target of a three-year investigation by the government. Guilty or not of criminal charges, that doesn't smack of a whole lot of thrift.

You get what you pay for in Biglaw. Don't expect your lawyers to live like college interns on the campaign trail.

-Not a WH attorney.

You are all assuming the entire bill is $12 million, as 3 stated above, the bill may have been $50 million plus the $12 million excess overbilling.

How is that unreasonable? Those fees seem completely standard based on what the case was. I actually would think the fees would be higher.

Do any firms use or allow Apple (mac)? Or is that only for college students and hippies?

Good point 9:33(2) and 9:30(1). Lat, can you clarify?

8,

OK, even if the bill was $50M, we are talking about $40 per document reviewed, i.e., about 8-12 minutes per document. We are also talking about 100,000 hours. 7 says that this was a three-year investigation (not sure if he is including the trial). 100,000 hours is equivalent to 16 lawyers dedicating 3 years to the case or 10 lawyers dedicating 5 years to the case.

I can't wait for McAffee to lose this lawsuit, and then pay $5 million in attorneys fees associated therewith.

12,

I agree that it could be reasonable. I just made up $50 mil as an arbitrary number. For all we know the entire bill could have been $13 mil or $113 mil. I'm just saying, all the biglaw lawyers claiming this is a BS lawsuit and that the cost is reasonable maybe need some more information. Just saying. . . .

I can't believe Wilmer hired Yetter. I imagine they are paying through the nose for such a small case.

There is nothing uncommon about a massive white collar litigation generating $12M in legal bills. I hope McAfee eats it.

P.S. Lat, can you get rid of the T14 blogger guy? He is super annoying...

Messrs. 8 & 12,

Or 1 lawyer dedicating 12 years of his life.

The problem isn't with WH, it's with the legal profession in general.

Discovery is absolutely out of control. In the old days discovery would go step by step, with the judge intricately involved in each step. Now the lawyers are left to work everything out themselves and the judge only gets involved once discovery is done. Obviously both sides are going to go overboard. Not just because they get to bill time, but also because if they don't they could be sued for malpractice.

Litigation needs to be fixed.

I think the complaint about hotel rooms isn't that they were luxury rooms -- it's that WilmerHale flew in counsel from across the country rather than using people in California.

16

Isn't it $12M in overbilling?

Sorry about the annoyance, but do you know the answer to my previous question.

I second 13. Hate it when these firms try and stiff-arm law firms, they should know better!

18,

You need to also lump the subpoena happy government in there.

And was it 1.2 mil docs produced or 1.2 mil docs reviewed? If the former, then total number reviewed could have been several million.

It is not a compaint alleging $12m in overbilling....the total bill was $12m. See articles from a few weeks ago by securitieslaw360 and others:

"....McAfee Inc.'s complaint requesting that WilmerHale forfeit most of the $12 million the network security software maker paid the firm to represent its former CEO in a criminal securities action."

As the tab for defending a single criminal defendant $12M is obscene on its face, and a very few potential juors would disagree.

The only qualification I have is if the bills were patently inflated, why did McAfee continue to pay month in month out?

13: Right on.

17: Or one lawyer billing four years worth of hours per year for three years.

25 comments and no "WilmerHale is TTT." Oh right, 'cause it's not.

-WH assoc.

25,

Or 1 lawyer billing every hour of every day for 2 years and 266 days.

17.

McAfee's probably just pissed WH didn't farm out the doc review to Bangalore like McAfee does with its software development

24, you're an idiot. Perfectly reasonable fee in a case of this size.

And if they didnt spend all that time and money on doc review and WH had missed something, McAffee would turn around and sue them for 12 mil in malpractice.

you get what you pay for. Dont hire big law firms if you can't pay biglaw prices.

These fees are fine for this type of bet the company litigation. wgwag

"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.

Rhetorical questions in a pleading are so TTT. The only other time I've ever seen that was from some ambulance chaser when I was clerking. Doesn't speak well of Mr. Rose's ability.

#24 = RETARD.

WH = TTT

'Nuff said.

10:08 - wilmer's ppp=ttt

24, good luck in your 2L year!

1035, WH's ppp pwns your salary. get back to posting on the staff attorney thread, douchewipe.

10:42, Why don't you just call him a n00b and get it over with?

Dear 35:

Thank you, but my second year of law school was in 1977, and it was one of my favorite years ever.

1035, you're a n00b.

game. over.

What rank out of Chicago for this firm?

McAfee definitely got screwed. I would have defended them all by myself for 1/2 that price. I bet a few of you on here would have as well.

1046: Depends whether you want to be an associate or staff attorney.

Damn, 38 is old as shit! I was born in 1977.

43:

38 has been representing indigents for as long as you've been alive!

38 is cranky because he needs a nap.

I also like the complaint about room service. Guess why lawyers order room service? So they can sit in their room and work while they eat.

38 is nappying because he's cranky

10:49: associate.

To keep things in perspective, OJ incurred $3.5M in attorney's fees in connection with a jury trial that lasted 9 months.

The Goyal trial lasted 5 weeks.

Moreover, the Golyal trial was largely a forensic accounting case. It was primarily the CPA-experts who had to compile, make sense of, and testify about the financial documents.

At the core of the case was a simple and straightforward theory: That Goyal bribed software resellers to buy and stock more software than they could possibly sell through various payments disguised as rebates in order to falsely book phony sales revenue, thereby artificially inflating the McAfee stock price, defrauding investors, and enriching Goyal in the process.

The guilty or not guilty verdict turned on that simple factual dispute.

My point is that most jurors (who I assure you will not be BigLaw associates or partners) will find a $12M legal fee to be obscene on its face.

Of course, it will all boil down the testimony by McAfee's fee auditor vs. Wilmer Hale's explanation, but McAfee is going into this with the better jury argument. We don’t know if associates were billing, for example, 26 hour days or what.

Yes, that is right 43. I have been practicing law longer than you have been alive. In that time I have talked to a juror or two and have also looked at a bill or two from outside counsel.

That is all.

seriously 38, get the hell off this blog. it's for young folk. go read the saturday evening post with your old ass.

1046, 1110: Sorry, we don't hire associates from TTT like UC. We have three staff positions available to which you may apply. Best of luck in your future endeavors.

-HYS

38 is fibbing, I believe. Liar, liar, pants on fire. No one who graduated in '77 would bother to fire back such a response, let alone comb thru the comments on this fun but idiotic blog.

49: the OJ trial was more than a decade ago. Also, there were not 1.2 million documents to review in OJ's case. That is not very good perspective you're offering.

38/49/whatever - Did you miss the part about the 1.2 million document review? It's amazing that in your vast experience you haven't learned the difference between a murder and white collar case.

Lat , you are lame. How about posting a copy of the actual complaint??

Lat , you are lame. How about posting a copy of the actual complaint??

I have to ask - where does the "guys from my high school" thing come from? I see it all the time, and it's usually hilarious, but I have no idea what the origin is. Can someone enlighten me?

"Did you miss the part about the 1.2 million document review"?

Look, the WH bill may be reasonable, it may not be. (On its face, McAfee has the better argument, but who knows?)

But just because McAfee generated, say, 1.1 million invoices to resellers during the time period embraced by the alleged scheme, that is not to say that it was reasonable for WH to have an associate read all of those invoices. You do oversimplify a bit.

It will be interesting to read in later coverage how many hours a day certain partners and associates were billing in a 24 hour period.

49: As others have pointed out, OJ was a murder trial from a decade ago, not white collar, and did not involve 1.2 million docs. Also, the fact that it involves forensic accounting doesn't make it less expensive, it makes it MORE expensive. Who, exactly, do you think hires, supervises, preps, etc. these CPA-types you think do all the work? The law firm. The lawyers have to know the CPA's job and their own. While I agree with you that jurors and other people who have no idea what they're talking about see $12 million and think "Whoa, that's waaaay too much! Lowell "the Hammer" Stanley only costs $5,000 for a whole case, and that's for a tricky DUI, which can really get you in trouble!", hopefully, should this sorry case ever get to a jury, it will become better informed prior to rendering a verdict. The fact that the uninformed and the stupid don't get it, doesn't mean its not correct. This isn't flyover state politics.

19: Exactly what CA lawyers was WilmerHale supposed to use? It has 2, brand new, CA offices that house a smattering of litigators. And those litigators might not even be white collar folks. McAfee did NOT hire WilmerHale because it wanted their local CA folks to try this case. Its unclear if WH's first CA office had even been opened when this case started. Its LA office certainly had not. The expense complaints are simply BS.

Agree with 57- where did the "guys in my high school..." comments come from?

-Flyover Lawyer

58 (who I assume is also 49): why do you keep saying McAfee has a better case "on its face"? Simply because the average non-lawyer juror will hear the $12 million number and say "Wow, that's alot."? That has nothing to do with their case, on its face or otherwise. Its simply a soundbite.

As for your documents comment, law firms have to review whatever documents MAY be responsive based on (1) what a subpoena asks for, (2) what claims and defenses there are, and (3) how much the firm and its clients can narrow down the universe of documents (which both try strenuously to do). If you think anyone just sat down and reviewed 1.2 million documents that they already knew were non-responsive, well, its just further evidence of your lack of experience.

Listen, I know this is more interesting than paying attention in Contracts or Torts. But throwing out your ideas like they are in any way informed by knowledge or experience - and then trying to defend them by creating wild theoretical "possibilities" like lawyers reviewing millions of documents for no reason to cover up the fact that you didn't realize it takes forever and costs bazillions to review 1.2 million documents - isn't doing anyone any good. It ain't law school out here. Talking for talking's sake isn't rewarded. Soon enough you'll be in the real legal world and can experience the pain and suffering that is a 1.2 million doc review. Until then, pay attention in class, make law review, and get a clerkship. Use your terrific grades, LR, and clerkship to land an associates position in BigLaw. Then you can screw around on ATL instead of reviewing 1.2 million docs like the rest of us.

<> Jeffrey Skilling, was charged with multiple counts of conspiracy and fraud related to that corporation's financial collapse in a trial that lasted approximately four months. Defense costs > $40 million.

<>Dennis Kozlowski, charged with misappropriating more than $400 million company funds. His first trial resulted in a hung jury; the second trial resulted in a conviction. The government estimates the total cost of his defense of both trials to be approximately $26 million. The Wall Street Journal reported that Kozlowski sought reimbursement from an insurer of "nearly $17.8 million" for the first trial alone.

<>Richard Scrushy, was acquitted of all 36 counts brought against him related to a reported $2.7 billion fraud on HealthSouth. The length of Scrushy's trial was five months. Defense costs: $31 million.
Source: “The Rising Cost of White-Collar Defense”, Robert G. Morvillo and Robert J. Anello, New York Law Journal, August 8, 2007

http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1186477610954

49: I'm assuming that your eyesight has gone in your old age, because, even if OJ had his 9 month trial done for less cashmoney, it was still just one case.

This one was "reflect[s] 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."

Five cases > one

OK, 63, you win.

Forward your comment to McAfee--I am sure it will pay the $12M immediately.

WH's motion to dismiss: "Five cases > one".

Seriously, there are interesting issues raised by this case, including the implications for white collar criminal defendants who fail to qualify for the federal defender but are not wealthy enough to afford what appears to be the prevailing "spare no expense" corporate funded standard.

Query, should a corporations duty to indemnify an officer from criminal defense costs be broader than the level of representation the same white collar defendant would get from the federal defender (1 lawyer, 1 assistant, no electronic documents expert, no forensic accounting team)?

See the link to the discussion about the Stein cases I posted at #62.

Now you're just dodging the issue, 64. The question raised in this case isn't whether the WilmerHale bill was reasonable with respect to some Platonic standard of how much it should cost in the expert opinion of ATL Commeter No. 64 to defend a white-collar case; the question is whether the bills were reasonable in comparison to what it *does* cost in the real world to defend such a case. And as has been irrefutably demonstrated, the WH bill falls comfortably within the scope of reasonableness as defined by the latter approach.

"irrefutably demonstrated," ??!!!

Wow. Since you have checkmated McAfee in one comment on a law blog, no way can Wilmer's defense counsel justify a bill exceeding five figures in resisting the excessive fee claim.

Impressive!

You must be really smart 64. You don't need to even read the pleadings, let alone review the documents, to “win” complex cases, nor do you even have to actually talk to the clients, let alone the witnesses.

64 I salute you.

I am at least smart enough to get the number of my own comment right when making stupid attempts at sarcasm, 66.

On the bright side, if 66 WAS trying to call 64 (i.e. himself) an idiot, it'd be the first thing he got right all day.

My experience with big law firms is that they perform an amazing amount of frivolous law and motion work, when they know it's frivolous, and the quality of work they do is quite poor.

It's nice to see a client take a stand.

One normally doesn't expect to see a decimal point in the word "Million."

You don't hire a firm like WH for a case involving a 3-year investigation and 1.2 million documents and the relocation of attorneys during trial and expect it to be cheap. There are plenty of cheap firms out there they could have hired, and they didn't because they wanted the WH cache. Seems too late to be complaining now.

The costs associated with discovery and review are very high. When the majority of you graduate from law school and go beyond a low level associate position you will understand this. In the meantime it has been fun reading your snotty posts.

The costs associated with discovery and review are very high. When the majority of you graduate from law school and go beyond a low level associate position you will understand this. In the meantime it has been fun reading your snotty posts.

I agree the bill looks "reasonable" by biglaw standards. But there's no question that firms and lawyers are much more lavish with their clients' money than with their own money -- a basic fiduciary / agency cost problem. Clients that don't regularly use biglaw firms (like here?) might be justifiably surprised at the final bill.

I thought most sophisticated clients give guidelines to outside counsel for what they will and will not pay for. I guess this client wasn't sophisticated, and now is getting litigious.

guys in my high school used to ask about guys in my high school who used to do things all time which were no big deal all the time, it was no big deal.

Agree with 57 and 60 -- where did the high school thing come from?

i billed $12M this morning

What kind of legal system is this, wherein a “wealthy” corporate insider with a net worth of a “mere” $5M cannot afford a defense to a white collar prosecution, and a “rich” defendant worth nine figures has to be reduced to poverty to defend his/her self?

PS: to 72-73: "go read the saturday evening post with your old ass." (Yes, Iam being sarcastic.)

PPS: to #50: Do me a favor. Print your comment, and put it in your safe deposit box and re-read it when you are 40 or 50. You will have a laugh, trust me.

What kind of legal system is this, wherein a “wealthy” corporate insider with a net worth of a “mere” $5M cannot afford a defense to a white collar prosecution, and a “rich” defendant worth nine figures has to be reduced to poverty to defend his/her self?

PS: to 72-73: "go read the saturday evening post with your old ass." (Yes, Iam being sarcastic.)

PPS: to #50: Do me a favor. Print your comment, and put it in your safe deposit box and re-read it when you are 40 or 50. You will have a laugh, trust me.

74 -- Your argument is sort of plausible, but 1) There doesn't seem to be any real basis for assuming that McAfee, Inc., a major Bay Area software developer, is lacking in legal sophistication. On the other hand, their current GC graduated from Santa Clara University Law School and worked for some firm I've never heard of prior to going in-house, which all sounds kind of TTT; 2) In my experience, clients are usually billed on a monthly or otherwise regular basis; it's highly unlikely that WH waited until the end of the trial before submitting a bill, yet there doesn't seem to be any indication that McAfee expressed any concerns about the costs while the action was ongoing.

Re: A White-Collar Defense Doesn’t Come Cheap

See this 2007 WSJ Law Blog post http://blogs.wsj.com/law/2007/07/06/a-white-collar-defense-doesnt-come-cheap/

Which raises the question: just how much does a high-profile white-collar defense cost anyway? Last week, the White Collar Crime Prof blog shed some light on the issue in an item on the Westar case. The backstory: Doug Lake, a senior executive at the Kansas utility, was indicted on fraud charges. His first trial ended in a hung jury, the second in a conviction. In January of this year, the Tenth Circuit reversed his conviction, but the government says it will try him a third time.
How much did all this cost Lake? Westar, which had indemnification provisions in its by-laws that allow for advancement of reasonable attorney’s fees, advanced $4.6 million to Lake’s attorneys at Hughes Hubbard in New York and Hite Fanning in Wichita. In addition, Lake hired WilmerHale to represent him on appeal, which cost another $2.27 million. Lake’s legal fees total more than $12 million, according to court filings.
But after the $4.6 million, Westar refused to pay another penny and asked the court to cut it a break. Judge Julie Robinson ruled that the hiring of Hughes Hubbard and **WILMERHALE** for such a complex case was reasonable, but required Westar to pay 50% of the claimed fees — or more than $3 million — for Hughes Hubbard and Wilmer Cutler, RAISING QUESTIONS ABOUT THE REASONABLENESS OF THEIR BILLS. (Here’s the opinion: http://lawprofessors.typepad.com/whitecollarcrime_blog/files/westar_energy_v_lake_attorneys_fees_opinion_june_28_2007.pdf)
The judge rejected Westar’s argument that billing rates should be capped at what a Kansas lawyer would charge and not the rates of D.C. and New York lawyers, ruling that if Westar wanted to limit its reimbursement to Kansas-lawyer rates, it should’ve put that in the contract. Going forward, Judge Robinson set up a procedure for Westar would pay the fees but allow it to object when it views them as unreasonable.

69: if you refer to the activities of the lawyers working for you as them doing "law work", you should NEVER hire a BigLaw firm. They are simply too much for you. Stick with firms that advertise on TV or in the Yellow Pages (or whose sign you see walking down the street of your town).

69: if you refer to the activities of the lawyers working for you as them doing "law work", you should NEVER hire a BigLaw firm. They are simply too much for you. Stick with firms that advertise on TV or in the Yellow Pages (or whose sign you see walking down the street of your town).

Every lawyer or law firm billing time to a client can be questioned at any time on the reasonable nature of his/her/its billings.

In addition, the outcome is no foregone conclusion.

In the referenced matter, the client alleges that it commissioned a 3d party audit of the billings which revealed that the billings in that particular case were grossly excessive.

That may or may not be true, but experts will testify on both side of the case to jurors who earn an average $65,000 a year. For such tiers of fact, a $12M legal fee bill to defend against a criminal case is staggering and unfathomable.

There is no way to prejudge this case, based on news accounts.

In addition, the agenda of most of the posters here notwithstanding, if the client demands a jury, then a lay jury will decide the reasonableness of the fee.

Simply repeating that 1.2 million documents were reviewed does not resolve the matter.

This may come as a shock to some of you who are not the billing partner on litigation matters, but just because you spent 12 hours on a Saturday reading X documents, does not mean that the billing partner billed 100% of that time to a client, or if he did, that he should have.

Furthermore, it may be that the corporation, due to the conflict, was not privy to the back up for the bills and/or was not in a position to object during the criminal litigation.

The corporation may indeed have a legitimate complaint about the reasonableness of billings in the matter.

Interesting post 4:48.

I doubt this will ever reach a jury though.

I agree 86--the case will settle for a write down of some amount--but McAfee hyperbolic, melodramatic complaint for “fraud” is going to delay that eventuality—unless there are a lot of 26 hour partner days billed.

83:

If you are a big firm lawyer, you have just proven my point. "Law and motion" is a typical, industry-standard phrase in the law world. A number of your beloved big firms, in fact, use this phrase in describing what their lawyers do (For example: http://www.reedsmith.com/our_people/directory_search.cfm?cit_id=2046&widCall1=customWidgets.content_view_1)

I know what I speak of. Much of the work done by these firms is not only poor quality, but serves no purpose other than to create billing hours.

J.N.O.V., 86. The issue is whether this bill is reasonable in comparison to the market rate for top-tier white collar representation, not what 12 poors in a jury box think is appropriate.

interesting that they didn't complain until after the lawsuit was over. one would assume they were paying the fees every month, so if they didn't like a practice they were seeing, they should have raised that complaint a long time ago. . .

90

how could they complain prior to any meaningful decision/verdict? they had nothing to gauge a success/failure. i'm sure they were fed the same BS that we give our clients.

not surprising - i made this decision on tuesday.

guys at my highschool used to dismiss cases summarily all the time, it was no big deal.