The Hourly Fee Must Die -- Some More

Blawgletter's heard scads of complaints about paying hourly fees in business litigation. We talked about that very phenomenon, and the reality it reflects, in August of 2007. But today brought a startling reminder that companies don't act as if they mind paying squads -- multiple squads -- to handle high-stakes lawsuits. Quite the opposite.

A squad, by the way, consists of eight to 16 soldiers.

News of Judge Selna's Memorandum of Decision re Injunctive Relief on the last day of 2007 in Broadcom Corp. v. Qualcomm Inc., No. 05-cv-467 (C.D. Cal.), pressed the memory into consciousness. Wanting to see the opinion itself for ourselves, we checked on the ECF site for the U.S. District Court for the Central District of California. And what we saw -- even before we could get to the Memorandum itself -- caused a sharp gasp to inflate our lungs.

What did we find? Why, we discovered incontrovertible evidence that none of the law firms working on the case has it on a pure contingent fee. What evidence, you say? Only that Qualcomm had 28 lawyers of record and that Broadcom carried even more -- a smooth 31.

For those of you counting, that means 59 lawyers -- just one shy of five dozen individuals and topping seven squads -- showed up on the docket sheet. In all likelihood, the same number billed to the file but never made an appearance in the case.

No contingent fee lawyer -- who stands to get a percentage of any recovery -- would throw so many bodies at a case. She'd want a compact, cohesive, and deadly trial team. A small squad at most and trial lawyers all. Efficiency and results would be paramount, overstaffing and and a wage-earning mentality abhorrent.

We may never know the tally of hourly fees and expenses for Broadcom and Qualcomm. But we can with smug confidence bet that they've exceeded the $19.34 million the jury awarded. That could not happen with a contingent fee arrangement. And the clock keeps ticking.

Comments

[D. Todd Smith]

I'm still trying to break free from the billable hour, with increasing success. From the plaintiff's side, evaluating whether to accept a matter on a contingent fee is fairly straightforward. But I still haven't settled on the best alternative-fee arrangement when working for the defense. A "reverse contingent" fee perhaps?