Court Recognizes BigLaw Rates Are Too High

This is something companies already know, but the Court has acknowledged it. The billing rates BigLaw charges for intellectual property litigation are too high.

Magistrate Judge Goldman recently found that Jones, Day’s rates in a discovery dispute to compel the production of documents were too high. In Etagz, Inc. v. Quicksilver, Inc., 10-00300-DOC, Central District of California, the Court ordered Etagz to pay “reasonable” costs and attorneys fees incurred by Defendant in bringing its motion for contempt and sanctions for Plaintiff’s failure to comply with an earlier order to produce documents.

The Defendant filed its statement of cost and attorney fees. In that statement, the Defendant asserted that it was entitled to $15,510.00 in attorney fees arising from 20 hours of work on its motion for sanctions. The Jones, Day attorneys listed their rates as $775/ hour and $675/hour. The Magistrate found 20 hours to be a reasonable amount of time for the motion. The Magistrate, however, said the rates Jones, Day charged were “excessive and unreasonable” and continued:

This Court is not aware of any case before it where
an attorney has sought that high an hourly rate for
an ordinary discovery dispute.

This case is another indication that BigLaw rates are not justifiable. 

The Magistrate explained, that based on the Economic Survey performed by the American Intellectual Property Law Association which sets forth median rates for intellectual property litigation partners and associates for the Los Angeles area, more appropriate rates for the Jones, Day attorneys would have been $475/hour and $325/hour--$300 less an hour than Jones, Day charged!

Magistrate Goldman’s decision finds further and perhaps more compelling support in the RateDriver mobile application based on actual legal spend data collected by TyMetrix across 100 contributing companies. RateDriver reports an average billing rate for a LA litigation partner with 15 years experience in a 100 attorney office is $458 (and $473 for an IP partner in the same type office).

Based on these billing rates, the Court ordered that the Plaintiff pay Defendant $9,250.00, as opposed to the $15,510.00 originally requested by the Defendant.

In this day when clients have compelling options to BigLaw, including boutiques formed by former BigLaw partners, it becomes more difficult to justify such excessive rates.
 

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FailedState - November 13, 2012 1:38 PM

Now keep telling yourself $475/hr is reasonable. And that compartmentalization of knowledge in a society translates into a sustainable profession and increasing human development in the culture. The last 50 years bear it out, so it must be true for the next thousand. Right. Of course. Go back to bed, America.

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