September 2007 Archives

September 30, 2007

If I Paid It …

How much did it cost to get O.J. Simpson to (hypothetically) confess to the 1994 murders of Nicole Simpson and Ron Goldman? According to News Corp, O.J. was paid an $880,000 advance for the book and a companion interview. (Simpson says that the money’s gone, used to pay bills and taxes. A court placed whatever’s left on hold.) Of course, News Corp’s actual costs for the confession were much higher—having to pay for the production and destruction of 400,000 copies of the original version of If I Did It, as well costs for the TV interview (never aired).

Who gets the proceeds? Under a deal struck in bankruptcy court, the family of Ron Goldman--who won a $33.5 million judgment (so far uncollected) against Simpson—gets 90 percent of the book profits and the remaining 10 per cent goes to a group of O.J.'s creditors. In what some may consider poetic justice, the 10 percent creditors includes several attorneys: a former Simpson attorney ($15,000); another attorney ($20,000); and a pair of law firms ($300,000). Other creditor’s include the book's ghostwriter ($350,000) and Simpson’s ex-in-laws, the Brown family ($24 million).

Why didn't Nicole Simpson's family get more? The Brown Family objected to the settlement and sued for the right to bid on the book. But their claim was denied because they planned to kill the book, not “maximize the sale of the asset” as ordered by the bankruptcy court. The result: one victim’s family gets 90 percent of the profits and the other gets less than 10 percent.

How much will the confession earn? First month's sales of If I Did It were 42,000 copies (Bookscan) and assuming, (hypothetically, of course) that there is a $10 profit per book, the Goldmans have earned about $378,000 and the other creditors (the lawyers, the ghostwriter, and the Browns) have earned about $42,000. If all 200,000 copies of the book eventually sell, then O.J.'s confession would generate $1.8 million for the Goldmans and $200,000 for the lawyers and the Browns. Of course, one of the nice things about acquiring the book in bankruptcy court is that there is no advance to be repaid to HarperCollins.

What about the Son of Sam laws? Back in the 1970s, New York legislators became upset when David Berkowitz -- the "Son of Sam" killer -- was reportedly working on a book about his crimes. That spurred passage of state laws (known as "Son of Sam" laws) that allowed a state to seize publishing money earned by convicted criminals and use that money to compensate the criminal's victims. The New York law was later declared unconstitutional but newer ones, avoiding some of the first amendment issues, have been passed (at least temporarily). California's revised version was struck down in 2002. Of course, a Son of Sam law would not have benefited the victims of the 1994 Brentwood murders since the killer -- as O.J. maintains -- has never been caught. No problem -- the Goldman family has forged a new paradigm for victim compensation in which everyone (including the lawyers, the victims, and even the perp's ghostwriter) can line up for payment.

September 15, 2007

First Year Associates: Beemer Me Up

160money.jpg Call them the Lords of the Bling. Salaries for first year associates in a few white-shoe firms rose to $160,000 in 2007.

How much more is that in billable hours? One blogger referred to this leap of faith as the “Great Associate Salary Spike of 2007” and calculated that if associates at Simpson Thatcher were billed out at $300 an hour, they'd need to work an additional 50 hours per year to cover the increase. The median for first year associates at firms with 500+ attorneys is actually a little lower at $145,000, according to the recently released NALP 2007 Associate Salary Survey, but it’s still a $10K jump over last year’s numbers.

What about the rest of the new lawyers? Keep in mind that those massive salaries apply to only a small fraction of first year attorneys. According to Payscale, the median salary nationally for recent law school grads is between $50,000 and $60,000.

September 14, 2007

Rule Ten Thousand: Go Directly to Jail

10kbill.jpgAmong the legends of New York jurisprudence is the infamous Rule 20, which required that an attorney making a legal filing include a twenty dollar bill for the local court clerk.

What's it cost to bribe an official today? That $20 patronage may be long gone, but if you’re wondering what the fee is for getting the inside track with a corrupt New York judge, apparently it’s about $10,000. That’s what one dad paid to influence a crooked justice in his custody case. The punishment for Dad’s bribery: three months jail time and an angry ex-spouse who told the New York Post, "I think for the crime he committed and for the pain he created, [three months] is very little." That $10,000 figure also jibes with the fee for bribing a corrupt Ohio D.A.—at least that’s what one prosecutor charged for reducing a third DUI to a first-offense reckless driving charge.

September 14, 2007

Read My Lips: No Contingency Fees

readmylips.jpgI reported on attorney/author Scott Turow’s crusade against the billable hour. But not surprisingly, as Wendy Werner pointed out, billable-hour lawyers don’t earn the record breaking fees of contingency fee attorneys.

What's a contingency fee? Contingency fees (or as some practitioners like to call them, “success based” billing) have their upsideallowing access to the court house for the financially disadvantaged.

What are the conflict of interest disclosure rules for contingency fees? Despite the slew of legal rules and disclaimers regarding contingency agreements, “There is no requirement that the attorney explain fully how his interests might conflict with those of the client.” That’s especially true when it comes to settlement, for example, when the client wants to snare a low settlement and the lawyer wants to take it to trial. Or consider the reverse, when the client wants to take it to court and the lawyer believes that’s a mistake.

What about when government pays contingency fees? State and federal governments often award contingency fees to private practitioners, a practice that's been associated with political favoritism and campaign contributions. Well, at least the federal government got a grip on it; in May 2007, President Bush signed an executive order prohibiting the feds from hiring of attorneys on a contingency basis.

September 14, 2007

Scott Turow Takes on the Billable Hour

billablehourcover.jpgNone of attorney Scott Turow’s legal thrillers (Presumed Innocent, Reversible Errors, etc.) have triggered the level of law firm tension and intrigue created by his essay, "The Billable Hour Must Die," the cover story for the ABA Journal (and excerpted from the book, Raise the Bar).

What's so bad about billable hours? Turow’s premise is that the billable hour creates a conflict of interest “almost in defiance” of professional ethic guidelines. Turow notes that the billable hour rewards inefficiency and creates an incentive to prolong the case since the longer it lasts, the bigger the fee.

And the replacement? Unfortunately, Turow has no suggestions for alternatives to the legal profession’s golden goose, adding that “it will take some education and experimentation on both sides.” Congratulations to Turow; it's a brave stance for a litigator to take. But will the 700 lawyers at Sonnenschein Nath & Rosenthal, his law firm, initiate some of that experimentation in their billing practices? (BTW, in 2004, Sonnenschein partners earned over $700,000 a year by means of that darned hourly billing.)

September 14, 2007

About This Blog

What does it really cost to balance the scales of justice? Nolo editor Rich Stim looks at legal economics and the costs of representation.

Rich is the author of Music Law: How to Run Your Band's Business, Getting Permission: How to License & Clear Copyrighted Materials Online & Off and co-author of several other Nolo titles.

The opinions expressed in this blog do not necessarily reflect the views of Nolo, its clients, or its partners. This blog may provide legal information, but not advice. Consult a lawyer if you want professional assurance regarding how the law applies to your situation.