“defense lawyers have been banking their money for years” – a lawyer’s perspective on Katrina litigation

“This is one of those cases where people see the verdict and the motion and think about all the money that the plaintiff’s lawyers will make. But the defense lawyers will make as much or more than the plaintiff lawyers while taking no risk. Equally as important, the defense lawyers have been banking their money for years while the plaintiff lawyers have to collect to fill a big hole.” (emphasis added)

In a comment to Katrina plantiffs win a big one, I mentioned Phillip Thomas at the Mississippi Litigation Review blog also had a post on Penthouse Homeowner’s Association v Certain Underwriters at Lloyd’s, London.

Thomas’ blog is one of my daily reads and his most recent post on the case, Winning Plaintiff in Katrina Wind vs. Water Trial Requests $3.5 Million in Attorney’s Fees, Expenses and Interest, provided both the title and introductory quote of this post as well as a link to Plaintiffs’ attorney Don Barrett’s Motion (in Scribd format below with Exhibits added by SLABBED)

Barrett made a strong argument in support of his request for $3.5 million in fees, expenses and interest – and a “must read” IMO for attorneys on both sides of the bar.  However, what struck me as even more interesting was this paragraph in Barrett’s Affidavit documenting his personal history of litigation as justification for his $450 hourly rate:

I am presently lead counsel of the Katrina Litigation Group, a consortium of lawyers who represent hundreds of homeowners along the Mississippi Coast who were victimized first by Hurricane Katrina and then by their insurance companies. To date our group has favorably settled over 1,600 homeowners’ claims (including those of former U.S. Senator Trent Lott, U.S. Representative Gene Taylor, and U.S. District Court Judge Louis Guirola) for more than $215 million. We are the only attorneys to have tried Hurricane Katrina cases to successful verdict in both state and federal court (Lisanby v. USAA, in June of 2008), resulting in a verdict and payment.

The “key words” here are “our group” as Barrett and his co-counsel, Mississippi native and Florida attorney Dewitt “Sparky” Lovelace, are the last men standing in what was once the Scruggs Katrina Group, reformed as the Katrina Litigation Group.  Jones was voted out, Scruggs was taken out and David Nutt ducked out.

Thomas reviewed Barrett’s list of cost with a lawyer’s eye and estimated “$5–10 million in defense fees and expenses”.  Applying that same logic to the $215 million settlement of those 1600 cases, the defense bar raked in half-a-billion or more in those cases alone – and with State Farm cases considered, a cool billion would be low end.

If his writing skills are any indication of his legal skills, Phillip Thomas “has the makings” of an excellent judge, one with the capacity to see both sides of the bar. Commenting on another case, he wrote, ‘this does provide a good example of a major difference between the plaintiff side and defense side of a case”:

On the plaintiff side, when a lawyer bills by the hour the fees can exceed the recovery. There is no danger of that on the defense side. That makes it a lot easier to justify high attorney’s fees in a defense case.

Hourly rate defense lawyers sometimes have trouble managing the economics of a plaintiff case. I can think of several examples where defense firm lawyers told me about their fun plaintiff case. When I inquired about the value of the claim, it sounded like it didn’t justify the amount of time being put into the case. It sounded like they brought the defense lawyer “leave no stone unturned” mentality to a plaintiff case.

But you can’t do that on the plaintiff side. On the plaintiff side, you have to manage your case better than you do on the defense side. You have to always keep the economics of the case in mind. Often, that means that you have to tell the client that the economics don’t justify filing the case.

On the defense side, it’s more about justifying each individual billing entry than justifying the entire defense costs. And the defense lawyer can always blame the high bills on the plaintiff’s lawyer or the case in general.

The defense lawyer can run up $500,000 in fees and tell the client it’s a victory when the case settles for $250,000. They neglect to tell the client that they could have settled for the same $250,000 back when there had only been $10,000 in fees incurred in the case…

SLABBED reports, you decide.

[scribd id=51769744 key=key-1cww74thy2z37laiikqd mode=list]

24 thoughts on ““defense lawyers have been banking their money for years” – a lawyer’s perspective on Katrina litigation”

  1. Well done Nowdy.
    We sometimes forget about that ‘other side’ making some really big bucks when we criticize the Plaintiff’s bar. Especially since the defense gets to play with NO DOWN SIDE. For the defense bar it is always a Win-Win.

  2. I’ve left a couple of comment with Phillip Thomas’ post on this subject. I wonder how much the late hired gun James Robie tagged State Farm for on his hourly rate?


  3. Not as much as Feinberg and his law firm are making for being glorified claims adjusters for BP. I saw a news story where it just increased from $850,000 per month to over one million dollars PER MONTH.

    Feinberg has been getting too much of a pass around here. It’s time to start beating the shit out of (figuratively) this greedy hog. There is a legal theory called “quantum meruit.” Feinberg does not seem to be very familiar with it.

  4. Wow, first Magnum, now Worley. And remember who Worley’s massive golden, cash-cow was from Katrina . . . State Farm. Where does this shit end? Oh right, it never does.

  5. Agreed, Sock. Feinberg is a grossly overpaid, carpetbagging, Yankee lawyer who ought to be tarred and feathered. Where is the outrage on that?

  6. Oh, and Bobby Jindal is a pig too, feeding at the trough of anyone willing to give him oodles of cash. Rome burns around him while he attends fundraisers.

  7. Hey Y’all, who are these fuckers?
    ~The head of a Louisiana-based firm that is helping to handle Gulf oil spill claims for British Petroleum is holding a fundraiser tonight for Gov. Bobby Jindal. An evening cocktail reception for $1,000 a plate –or $5,000 to be considered an event “host”– will be held at the office of Mike Worley.
    Founded in 1976, The Worley Companies, which changed its name to Worley Catastrophe Response in 2007 after Katrina hit MS and the Corps flooded New Orleans , engages in the assessment and processing of property and casualty claims for the insurance industry. They were a private contractor to BP PLC for processing claims and now work for the claims operation headed by Ken Feinberg on behalf of the British oil giant.

  8. Hey sop, I figured yous knew these beotches.
    I was looking for that post, ’cause ah remebah!
    So it appears that private insurers are pulling the lion’s share of the carcass?
    More! Ah want mah scalps!

    OH and btw CAT Bonds have performed swimmingly on the Japan Tsunami!

  9. We’ve neglected Japanese insurance and not for a lack of info. I’ll make a point to change that and get some light on that topic.


  10. Speaking of parties and fundraisers and such


    “In the previous issue of New Orleans Homes & Lifestyles, we published the first installment of our third annual Renaissance Awards in collaboration with the Preservation Resource Center, honoring those who have added vitality and breathed new life into buildings while preserving their historic significance. The honorees were feted at a luncheon on Oct. 22, 2010, in the Grand Ballroom at the Ritz-Carlton.

    Each of these individuals has persevered in the face of adversity and put great thought, effort and detail into their renovations. In a city that embraces the past and looks forward to a bright future, they are inspirations to all of us who have dealt with the trials and triumphs of restoring a damaged property and ultimately transformed it into something even better.
    Sen. and Mrs. Joel Chaisson and Erika and Jude Olinger are presented in this final installment of the Renaissance Awards, and we applaud them for their tasteful reconstructions.

    Sen. and Mrs. Joel Chaisson
    Camp Street

    What was the reason for the renovation?

    Joel: New Orleans is full of so many wonderful old buildings that have tremendous potential to be restored to their original glory. I

  11. Hey, great comments – much more interesting than those at the all-day meeting that keep me away! Too tired to explore right now, unslabbed, but maybe later – “hidden cameras” you say?

  12. I have lived on Camp Street in a double shotgun, made single dwelling and there wasn’t any kind of ballroom like that available. Besides, I can’t place that place on Camp either. The one on Constance could be around the corner from where I lived — much smaller than my double turned single.

  13. I have lived on Camp Street in a double shotgun, made single dwelling and there wasn’t any kind of ballroom like that available. Besides, I can’t place that place on Camp either. The one on Constance could be around the corner from where I lived — much smaller than my double turned single.

  14. I know…I’m going to hear some BS…yea, I give a shit…NOT…

    Unlike Ms. Fayard, I hate defense lawyers, whether they be Democrats or Republicans…and I don’t care who they bank with !!!

    And just wait till I get started on Joel, his sister, and his father…

  15. Wow attorneys just moved to gain a crap load of money. Litigation cost or a need for more attorneys for the BP class-actions. Oop’s I meant to say a lap top has taken missing with Louisiana claims.

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