It has been a few days since our last detailed story about the largest law firm bankruptcy in history. So let’s check in on the Chapter 11 proceedings of Dewey & LeBoeuf, currently pending in bankruptcy court for the Southern District of New York.
There have been a few recent developments. For example, as we mentioned in Morning Docket, Dewey is being counseled in bankruptcy by some pretty pricey advisers.
How expensive are we talking?
Dewey & LeBoeuf has asked for approval from Judge Martin Glenn to pay its bankruptcy lawyers, Albert Togut and his team at Togut Segal & Segal, fees of up to $935 an hour. As reported by Am Law Daily:
Partners at Togut’s firm charge between $800 and $935 an hour, associates and counsel between $185 and $715, and paralegals and law clerks between $145 and $285. For its first month of work for Dewey, a time when the firm shed at least 40 partners according to our past reports, Togut’s firm was paid $406,053. The firm now also holds a $1 million retainer.
Some observers, such as the New York Times editorial board, have fretted about the high fees charged by counsel in bankruptcy cases. But given the high complexity, high profile, and high stakes of many bankruptcy matters — the D&L bankruptcy, for example, involves hundreds of millions of dollars (and hundreds of angry lawyers) — it doesn’t seem unreasonable for legal advisers to charge a pretty penny. And $1,000 an hour isn’t as big a deal as it used to be. Nowadays there are lawyers out there charging $1,250 an hour or even $1,800 an hour. At $935 an hour, Al Togut, a dean of the bankruptcy bar, looks like a bargain.
Dewey has asked the court to approval the retainer of three law firms, two restructuring firms, a collections agent, a public relations firm and a consultant to evaluate potential claims against partners and former partners. Each carries a hefty price tag….
[S]ome interesting extra nuggets have emerged from the filings, particularly with respect to Goldin Associates LLC, the consultant advising the firm on a settlement with former partners, who are expected to will face clawbacks of past compensation. The firm’s bankruptcy lawyer, Albert Togut, has said the goal is to reach a settlement as quickly as possible, something that in other firm failures has taken years to accomplish.
Well, it looks like Goldin had a little bit of a head start on this one, since court filings show it was brought on nearly two months ago….
Goldin’s services don’t come cheap. The firm charges between $150 and $795 an hour, as noted by Am Law Daily, and it has already received some $660,000 from Dewey. But Goldin does have some experience in the law firm bankruptcy arena, having worked on the Coudert Brothers case, and its mission of working out a global deal with ex-partners is important and complex. So perhaps it’s worth the big bucks.
The WSJ Law Blog expressed some skepticism about Dewey’s request to pay Sitrick and Company, the high-profile crisis communications firm, hourly rates of between $185 to $895: “Given that Dewey’s main crisis — whether the firm could survive — has already been resolved, Law Blog found itself wondering why the ongoing need for spin.” Good question.
(I’ve had some dealings with Sitrick folks, and I can’t say I felt I had a $895-an-hour experience. As Edward Adams of Bloomberg Law recently tweeted, “Dewey & LeBoeuf asks to rehire PR firm that charges up to $895/hr. That’s a lot of $ per ‘no comment.'”)
You can read more about the gaggle of Dewey advisers and how much they charge — another big one is restructuring firm Zolfo Cooper, where managing directors bill out at rates ranging from $775 to $825 an hour — over at Am Law Daily and the WSJ Law Blog. Objections to Dewey’s retention applications are due on June 29, and Judge Martin Glenn will tackle them in a hearing scheduled for July 9. (You can check out the docket and court filings over here.)
As of now, no party has announced plans to object to the retention applications. But other aspects of the bankruptcy may be more fraught with conflict….