Biglaw, Billable Hours, Partner Issues, Skaddenfreude

Nixon Peabody Partner Gets Chastised by a Federal Judge for Work Hoarding

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Nixon Peabody was a winner in Signature Flight Support Corp. v. Landow Aviation, a dispute between two aviation companies at the Washington Dulles airport. Nixon landed a victory for Signature Flight, and filed a motion for Landow to pay attorneys’ fees in the case.

Landow thought Nixon’s fees were sky-high and opposed the motion, resulting in a review of Nixon’s bills by Judge James Cacheris (E.D. Va.). Judge Cacheris buzzed Nixon’s bills. From the National Law Journal:

U.S. District Judge James Cacheris of the Eastern District of Virginia determined that Nixon Peabody’s $1.57 million in fees was too high and slashed about $440,000 off that amount, awarding $1.13 million….

In his July 30 decision, Cacheris found that the number of hours Nixon Peabody expended on the case demonstrated a “lack of billing judgment exercised by plaintiff’s counsel” and “overall excessiveness of plaintiff’s fee request.”

Less than half a million slashed? Pocket change — though that was on top of $205,102.50 that Nixon says it had already excluded from the bill.

Reading the opinion offers lots of fun Skaddenfreude, perhaps particularly for attorneys laid off by Nixon Peabody early last year. Partner Louis Dolan got knocked by the court for spending hundreds of billable hours at the end of 2008 doing work better suited for a junior associate…

Let’s look take a look at the ruling. Judge Cacheris, the brother of Monica Lewinsky attorney Plato Cacheris, blows hard in his opinion [PDF]:

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Likewise, the Court finds that the excessive number of hours expended on drafting the Complaint and on performing common discovery tasks by Mr. Dolan, as opposed to a more junior associate, suggests to the Court Plaintiff’s failure to exercise billing judgment. In August 2008, Mr. Dolan, whose rate was $590 per hour, spent approximately 30 hours drafting and revising Signature’s Complaint. In light of Nixon Peabody’s history of representation of Signature, the number of hours Mr. Dolan spent on drafting a Complaint, which does not dramatically differ in the subject matter from the work it previously performed for Signature, seems inappropriate.

Moreover, the Court feels that many of the discovery tasks performed by Mr. Dolan, such as document production and review between October 2008 and April 2009, should have been performed by a more junior attorney, which would have lowered its fee requests significantly.

Coincidentally, Nixon got rid of some junior attorneys in February 2009. A tipster who sent this along took this lesson from the opinion:

This story is a great example of the obvious — when firms slow down, the partners take all the work and associates get hung out to dry. Nothing surprising or inherently “wrong” with that way of operating a for-profit entity, but in the legal field a partner may want to think twice before doing all the doc review himself or herself — the judge explicitly references that kind of work as being a dubious task for a $600/hr partner and more appropriate for an associate.

Partners, you are warned.

The judge also took issue with just how long it took for Nixon Peabody to get things done:

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Defendant submits that Plaintiff spent 119.6 hours in September 2008, 42.7 hours in October 2008, 144.6 hours in November 2008, and 114.8 hours in December 2008 on the preliminary injunction motion alone – a total of 421.7 hours…

The Court recognizes that the work performed on researching, drafting, and arguing the preliminary injunction motion provided important roadmap for Plaintiff with respect to its strategy in pursuing this litigation. However, spending almost 420 hours, which equates to almost 53 full work days, on drafting and defending a preliminary injunction motion is unreasonable in light of Plaintiff’s counsel’s familiarity with the disputed issues. For the same reasons, spending approximately 50 hours on drafting and revising 11-page supplemental declarations and expending significant number of hours on post-Complaint research and preparation appear unreasonable to the Court.

The judge found that Dolan and associate Scott Maule had billed Signature for doing the same work the previous year, and shouldn’t have had to refamiliarize themselves with the material. As far as we can see, Nixon did not make the argument that they really didn’t have anything else to do with their time. Doesn’t the judge know what the legal industry was like in late 2008/early 2009? Things were slow — doing “unnecessary and redundant” work was one of the few ways to keep busy.

Judge Cacheris also took a look at Nixon’s billing rates to see if they were reasonable. He ultimately found that they were, but not before putting up a stink over these Washington, D.C. attorneys coming on down to Northern Virginia with their high rates and northern airs. He dismissed billing rate reports and surveys that Nixon had submitted as average for the D.C. area, saying they didn’t apply in the birthplace of presidents, including this quote to explain his decision:

“The Potomac River has divided this nation in war and in peace. Even more than the Mason-Dixon line, it separates the solid South of yore from the kaleidoscopic North. It still serves as a physical, and a metaphysical, division between the national and international politics and concerns of the nation’s capital and the more parochial problems of the Commonwealth.”

Until now, we didn’t realize that the federal judiciary saw D.C. and Virginia as still being in a Confederate stand-off.

Cacheris also took issue with plaintiff’s love of fine hotels and various “entertainments.”

However, even if the Court were to assume that all eight rooms were necessary to accommodate the out-of-town witnesses, the Court believes that $305.10 per night stay at the Westin was unnecessary…

[I]t is difficult for the Court to believe, and Plaintiff does not explain how, that the faxing or internet charges incurred at the Westin, frequent “entertainment” charges in addition to meals, numerous first class plane tickets, limousine rides or pick-up service to and from the airport, and approximately $400 nightly stays at Hyatt were necessary and reasonable costs related to this litigation when cheaper more reasonable options were at the witnesses’ disposal.

That led the judge to knock another $16K off the bill. Our tipster opines:

Another interesting twist is that if NP had billed their client for this work (as opposed to asking the court to have the opposing party pay), I bet they would not have asked for so much. At bottom, this case stands for the proposition that when it comes to asking for the court to award fees, use good judgment (duh) — which NP did not exercise here, as the judge repeatedly states in his opinion (they also failed to do so with their “non-theme song” years ago).

As they say in the NY bankruptcy world (when filing a fee petition as debtor’s counsel), be careful – pigs get fat, but hogs get slaughtered. That is a truism in the Rocket Docket too.

Nixon Peabody still took home over $1 million in fees, but its clients will probably be looking at their bills a little more closely moving forward.

Virginia is for lovers, but Nixon Peabody now knows there is at least one hater there.

Signature Flight Support Corp. v. Landow Aviation: Memorandum Opinion (Nixon Peabody billing smackdown) [U.S. District Court for the Eastern District of Virginia]
Judge: Nixon Peabody charged excessive fees [National Law Journal]

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