Routine Employment Discrimination Cases and Excessive Legal Fees

We have all heard complaints about the rising level of attorney fees, especially at large law firms.  It can cost well over $100,000 as a company just to defeat a frivolous employment discrimination claim.  Now, apparently some smaller companies are fighting back at what they see as unfair billing practices by larger firms.

The Legal Intelligencer reports:

The high demands on partners in global law firms to increase profits, the client said, ultimately led to its claims of professional negligence against Reed Smith. The religious nonprofit alleged it was excessively charged for its legal representation in a routine employment discrimination case, according to the complaint in The Bair Foundation v. Reed Smith.

And the nonprofit's attorney said he thinks these large firms shouldn't represent the smaller organizations.

The Bair Foundation, described in the complaint as a Christian charitable foundation devoted to foster care for children, sued Reed Smith in Lawrence County Common Pleas Court in Pennsylvania after it was allegedly charged nearly $1 million in legal fees and costs in defense of the suit.

The Bair Foundation brings claims of breach of contract, breach of fiduciary duty, legal negligence, fraud and unjust enrichment. The foundation said in the complaint that it was originally told the case would cost them $50,000. That was then upped to $112,000 during the case. The final price tag in legal fees and costs for the litigation, which the foundation ultimately lost, was $960,409, according to the complaint.

Of course, I do not whether the fees in this case were run up or not, but I do know as a labor and employment associate at two different law firms I constantly worried that I was spending too much time (and money) on research and writing for small clients. 

This type of scenario may represent another strong reason why we need to abandon the per hour system and start thinking about charging clients, on the management side at least, a project-based fee for legal representation.

Hat Tip: John Sargent

PS