Overlawyered: Chronicling The High Cost Of Our Legal System

Update: tasty BlackBerry fees

Having represented patent-holding company NTP Inc. in its lengthy and much-criticized suit against BlackBerry maker Research in Motion (Mar. 4, etc.), the 250-lawyer Washington, D.C. law firm of Wiley, Rein & Fielding is going to be pocketing a contingency fee of roughly a third of the $612.5 million settlement, or $200 million plus. That exceeds […]

Having represented patent-holding company NTP Inc. in its lengthy and much-criticized suit against BlackBerry maker Research in Motion (Mar. 4, etc.), the 250-lawyer Washington, D.C. law firm of Wiley, Rein & Fielding is going to be pocketing a contingency fee of roughly a third of the $612.5 million settlement, or $200 million plus. That exceeds the entire 2004 revenue of WR&F, which has heretofore been better known for its Washington regulatory practice than for plaintiff’s contingency-fee work. (“NTP lawyers laughing all the way to the bank”, Mobile Magazine, Mar. 17; Ashby Jones, Wall Street Journal law blog, Mar. 17).

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6 Comments

  • I’m no great fan of class-action lawsuits, since I saw what a sham one against Apple Computer was. The lawyers in that one made out like bandits, earning perhaps $300 for every hour of THEIR time. If I’d gone for the pittance they won Mac owners, the paperwork and other requirements would have had ME earning about $10 an hour. Disgusting!

    But I make an exception in this case. Blackberry users ought to file a class-action lawsuit against NTP and its law firm, Wiley, Rein & Fielding, for illegally extorting the $612.5 million whose costs RIM will be passing on to them.

    No valid patents, no valid claim to settlement money seems a good legal argument to me. And not being RIM, they’re not a party to the never-sue-the-other provisions of that out-of-court settlement.

    Who’ll be the brave law firm that will take on this pioneering lawsuit? The chance at $200 million almost honestly earned ought to tempt at least one firm.

    –Mike Perry, Inkling Books, Seattle

  • What is the “overlawyered” issue here, Walter? Looks like a win/win for all concerned. Is the mere fact that a contingency fee — a big one — was earned suggest something inappropriate was done?

  • The contingency fee system is itself (one part of) the problem. In this case (like many others), the case itself has been shown to be without merit, yet it was cheaper for the defendant to settle (for $612,000,000) than to continue with the fight, and the offending lawyers (those pushing a patently bogus lawsuit, pun intended) made out with over $200,000,000 out of the deal.

    • By Deoxy

  • In answer to Ron, to the extent defense firms find plaintiffs-side contingency-fee work more remunerative, it will raise the opportunity costs, and thus hourly fees, of defense lawyers, increasing the cost of litigation all around for big and small companies alike, even beyond the increase in litigation costs that will come into play because of other firms seeking lottery-style payouts.

    • By Ted

  • Ron: A little history. At the turn of the 19th Century, lawyers were paid by the hour, as they were in Britain.

    Plaintiffs would win. Collect their settlement. Then, refuse to pay the lawyer.

    The contingency fee was not to open the court room door for the poor. It was a collection scheme for the lawyer. Once no real money is involved, the hourly fee kicks in again, as in the criminal law, non-litigation legal services. The poor need to open the court room door in the criminal law far more than plaintiffs in civil suits, yet it is hourly rates paid in advance for them and everyone else. I think the hours should be in the public record so that the hourly rate of the plaintiff attorneys can be calculated.

  • I’m sorry, I’m only a lawyer, so please humor me. How has “the case been shown to be without merit” when in fact it has not been decided “on the merits” and a number of key decisions have gone in either direction?