National Consumers League

Egregious lawyer's fees hurting consumers


SG-headshot.jpgAs a lawyer myself, two recent articles on rising lawyer’s fees caught my attention. According to the Wall Street Journal, some lawyers at “white shoe firms” are now charging up to $1,500 an hour for their services. These are not harmless developments without ancillary effects. Most of these firms are working for big corporations–or shockingly, local or state government–which simply pass these exorbitant fees along to their customers or taxpayers. In other words, the little guy ultimately pays for these fees. 

In a separate article, the Wall Street Journal reported that the law firm of Wilmer Hale is charging the city of Baltimore $2.2 million for legal fees in its discussions with the Department of Justice in the aftermath of the Freddie Gray shooting. If the Wall Street Journal ran this story for its shock value, it certainly succeeded in shocking me. The Wilmer Hale lawyer who is heading the legal team for the city is no doubt very talented and experienced. But, in a previous job with Fannie Mae, that lawyer walked away with $26 million in fees before the government bailed out the mortgage agency. Given that windfall, she might have considered waiving her fee to Baltimore.

Baltimore is perennially cash-strapped. Wilmer Hale claims it gave Baltimore a 10 percent discount.  But, the firm made $2.2 million on the deal! I think it’s wrong to charge struggling municipalities these high fees. Wilmer Hale could afford to represent Baltimore pro bono or low bono; and certainly every firm, big or small, has a nonprofit rate (and it should not exceed $350 an hour to be affordable for nonprofits). Another option would be to do what Miami, Cleveland, LA, Seattle, and Portland have done, and handle similar probes with in-house counsel.

Representatives of Baltimore’s legal department have explained their decision to outsource legal counsel with the rationale that they need a more experienced firm. But, Baltimore is a poor city, with a per capita income of around $24,000. Paying  $2.2 million to a corporate law firm that charges top rates seems like a poor use of taxpayer money and erodes citizen confidence in government.