Attorney Fees

McGuireWoods Sued Over Fees

Posted Jul 16, 2007 7:43 AM CDT
By Debra Cassens Weiss

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McGuireWoods is defending a malpractice lawsuit by a New York company that claims it paid too much in legal fees in a civil racketeering case that ultimately reached the U.S. Supreme Court.

Ideal Steel Supply Corp. says the firm hiked its rates without permission and drove up fees by failing to hire a specialist to argue its racketeering claim, the New York Law Journal reports. Ideal ultimately hired a different lawyer to argue the case, but lost before the high court.

Ideal paid McGuireWoods about $1 million in fees.

A New York judge permitted Ideal’s fee claim to go forward but dismissed a second claim alleging the firm improperly focused on an “intellectually novel” strategy to the exclusion of state law causes of action.

The U.S. Supreme Court rejected that strategy when it ruled for National Steel Supply Corp. last year in a case based on the Racketeer Influenced and Corrupt Organization Act. Ideal had claimed National Steel, a competitor, failed to charge sales tax to customers who paid cash in a RICO scheme. Ideal was originally represented by Ross & Hardies, which was later acquired by McGuireWoods.

McGuireWoods spokesman William Allcott says the malpractice suit is just about money. "It's a dispute over the value of our services," he told the legal newspaper. "They're trying to get a refund of money they've already paid us."

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