Is Associate Worth $450 Hourly? Fee Cited in Latham Dispute
Updated: Century Indemnity Co. says a charge of $450 an hour for an “unlicensed” associate at Latham & Watkins is excessive, as were other legal fees charged by the law firm in a toxic tort case.
The insurer is asking a Los Angeles court to compel arbitration in the fee dispute with Latham in a motion filed partly because of the $450 hourly bill, the American Lawyer reports. Century Indemnity has paid about 27 percent of Latham’s fees in the law firm’s defense of Montrose Chemical Corp. under an agreement with other Montrose insurers. In a four-year period ending in 2006, the law firm billed about $21.8 million dollars and Century paid about $5.8 million of the tab, according to the story’s summary of the petition allegations.
Century claims Latham did unreasonable and unnecessary work on the case and charged excessive hourly fees. The law firm billed fees ranging from $380 to $450 an hour for lawyers; Century says a more reasonable fee would be $140 to $180 an hour, according to the story.
Century also says Latham refused to bill time by tasks, instead making a bulk time entry for each day’s work. And it says Latham billed more than $330,000 for internal communications and memoranda. “For the most part, the team of 15 attorneys and 11 staff spent their time reviewing the same things and then billing to confer among themselves about what they had reviewed,” the petition says.
Latham, in an e-mail statement sent to the ABA Journal today, denies that the associate in question was unlicensed. Indeed, the firm maintains the individual was a former judicial clerk who was licensed at the time.
The firm adds the following statement: “The issues raised in Century’s petition to compel arbitration are the subject of a previously filed lawsuit now pending before Judge Carolyn B. Kuhl of the Los Angeles Superior Court, Complex Case Division, brought by Montrose Chemical Corp. of California against Century.”
According to the firm, Montrose seeks contract and bad-faith damages arising from Century’s breach of its duty to defend Montrose in complex toxic tort lawsuits pending in Texas that involve 1,900 plaintiffs seeking more than $100 million for personal injuries, property damages and punitive damages.
The firm maintains that Judge Kuhl has previously ruled that Century breached its defense obligations to Montrose and isn’t entitled to arbitrate the reasonableness of defense costs.
“Century performed internal audits of all Latham bills for reasonableness between 2002-06 and determined that all should be paid without objection,” according to Latham. “The new Century filing follows a court order denying Century’s motion to stay Montrose’s bad-faith lawsuit pending its appeal of Judge Kuhl’s order in favor of Montrose. We expect Century’s meritless and inflammatory petition to be resolved in accordance with Judge Kuhl’s prior rulings.”
Updated at 3:24 p.m. April 24 to add statements from Latham.
