Lawyers at large firms are notorious for hefty bills, but $450 per hour for an associate who hadn't even passed the bar?
That's the claim made in a suit filed April 17 by insurer Century Indemnity Co. against Latham & Watkins LLP and firm client Montrose Chemical Corp. of California.
Century Indemnity filed the suit in Los Angeles Superior Court in an effort to force Latham and Montrose into an arbitration proceeding over a $5.8 million legal bill. The dispute stems from the firm's representation of Montrose, which was sued by the state and federal governments for dumping DDT into the ocean near Palos Verdes.
Attorneys representing Century Indemnity did not return calls seeking comment.
Latham disputes the allegations. In a statement to the Business Journal, the firm noted that Century Indemnity had performed audits of its bills during the 2002-06 period "and determined that all should be paid without objection."
Century Indemnity, one of many insurance companies covering Montrose, agreed in 2002 to pay 27 percent of the total fees and costs that Latham attorneys and paralegals billed while representing Montrose in the toxic tort case.
Latham billed $21.8 million in fees and costs from June 2002 to December 2006, according to court documents, and Century Indemnity paid $5.8 million of the total. But now the insurer is complaining Latham's bills are outrageous.
Among the allegations are:
- Latham billed the work done by a law school graduate who hadn't passed the bar yet at a rate of $450 per hour for a total of $61,695 in fees. Century Indemnity said it had paid $180 for partners, $140 for associates and $75 for paralegals in similar toxic tort cases. Latham said the associate mentioned in the allegation was a former judicial clerk and was "a licensed attorney" at the time.
- A team of 15 attorneys and 11 support staff workers did separate reviews of matters in the case, then got together to compare notes and billed $332,496. Century Indemnity said that was an example of excessive billing on unproductive matters, such as redundant reviews and meetings to discuss them.
Century Indemnity is asking a superior court judge to force Latham and Montrose to participate in an arbitration proceeding to resolve its claims over whether any of the fees charged by the law firm were unreasonable or unnecessary.
After a few years considering whether to set up an L.A. outpost, Jenner & Block LLP opened a downtown office two weeks ago and hired former Kirkland & Ellis LLP partners Rick Richmond and Brent Caslin. The Chicago firm is at least the ninth to open an office in Southern California since the economy weakened, including Milwaukee's Gonzalez Saggio & Harlan LLP and Philadelphia's Blank Rome LLP.
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