Apple Doesn’t Want to Pay the Feds’ E-Book Lawyer $70,000 a Week

http://allthingsd.com/20131129/apple-doesnt-want-to-pay-the-feds-e-book-lawyer-70000-a-week/

by TinyBig • 13 years ago

76 96 13 years ago

RexRollman• 13 years ago

Although I supported the anti-trust action taken against Apple, I have to say that agree with them in regards to these ridiculous charges.

craigyk• 13 years ago

On top of that, from what I read, he regularly demands meetings with Cook, Ive, etc. Seems like the actions of someone on a power trip.

DanBC4• 13 years ago

Sir Jonathon Ive is senior vice president of design, and is listed as an executive, and was considered to be Jobs's "spiritual partner at Apple".

Look at the placement of Ive here http://www.apple.com/pr/bios/

When a company fucks up, and is caught, and has court ordered scrutiny, it seems reasonable that the executives are going to be scrutinised.

The way to avoid this scrutiny is to avoid breaking the law.

willvarfar• 13 years ago

These interviews being in the first two weeks, though. Is that 'regularly'?

freehunter2• 13 years ago

Does all of that $1100/hr go to Bromwich, or is it payed to the federal government (or the company that pays Bromwich) who then pays Bromwich some percentage of that? We've had contracts at work for $80,000/yr where the contractor only saw $50,000 of that. The rest was payed to the company he worked for.

If the entire sum isn't going to Bromwich or if the court agrees with the price he's charging, I'd chalk it up to being the price you pay for anti-trust behavior. Then again, I don't know how much a company should pay for compliance monitoring after being convicted of anti-trust behavior. Either way it is a lot of money, but if it's not all going to Bromwich's pockets, it sounds like a fine being imposed for the duration of the anti-trust monitoring.

judk3• 13 years ago

Assessing a fine, paid to govt or restitution is one thing. Mandating an extorntionate contract , payable to the judge's buddy, is another.

freehunter2• 13 years ago

That's exactly the differentiation I tried to raise in my point. Is this a fine paid to the government who then pays the lawyer some percentage, or is all of this money going to the lawyer? One would be acceptable, the other would be less so.

carbocation• 13 years ago

If Apple were forced to pay the State $70,000 per week, I don't think this would be an issue. I do find it uncomfortable that the State is forcing Apple to transfer wealth to another private party without any (obvious) oversight.

dnautics3• 13 years ago

moreover the private party's flippant attitude is really distressing. i'm no fan of Apple, but this has now become an abuse of power, whether or not the actual financial costs are reasonable.

andyakb• 13 years ago

it's an abuse of power to be flippant?

growse2• 13 years ago

If someone questioned why I should be paid market rate for my expertise, I'd probably have a flippant attitude as well. Especially if they should know better, like Apple should.

jonknee2• 13 years ago

If Apple was in this to save money they wouldn't have taken this to court in the first place, they got caught with their CEO and most senior executives overtly participating in price fixing.

Now Apple is quite literally spending more money in legal fees than they can possibly save to argue about "excessively" high legal fees. Apple will spend millions to try and make a point, this is just more of the same.

rayiner7• 13 years ago

This article provides more context: http://allthingsd.com/20131017/apple-gets-its-e-book-antitru...

"Together, Bromwich and Nigro will oversee Apple’s internal antitrust compliance policies and employee training on them for the next two years."

$1,100 an hour is not an unusually high fee for internal investigations work, nor does $70,000 per week seem unusually high for an ongoing compliance investigation and policy restructuring of an organization as large as Apple. This sort of work usually involves getting down into the weeds and looking at how even fairly low-level employees go about their jobs. The going rate for this sort of work tends to be pretty high, because companies who hire law firm to do an internal investigation tend to be in a pretty tight spot.

toomuchtodo• 13 years ago

This is the first time I've heard someone try to explain an extortionate hourly rate as "reasonable fees".

Would the argument be the same if a private firm was charging the government at the same rate? Or would we be here with pitchforks demanding answers?

ghshephard• 13 years ago

What makes you think the rates are "extortionate?" I don't really know if they are or not, but I'm wondering if you have some information that supports your position?

icelancer4• 13 years ago

Would the argument be the same if a private firm was charging the government at the same rate? Or would we be here with pitchforks demanding answers?

Have you looked at attorneys' fees for this kind of work? $1,000/hr is not unreasonable whatsoever. My friend isn't even a partner in an IntProp firm (just a five year associate) and he is billed out at $650-700/hr for the most basic of tasks.

rfrey• 13 years ago

rayiner didn't say they were reasonable, he said they weren't unusual.

rayiner7• 13 years ago

Internal investigations are a lucrative practice area. When a company hires a firm to do an internal investigation, something has gone sideways, and companies are willing to pay top dollar to fix things.

Look at it this way. Another way this situation could have gone down is that Apple could have conducted an internal investigation of its antitrust practices before the DOJ's action against them, in order to show that they were proactively and voluntarily addressing the problems. If Apple had hired a private firm to do the investigation, $1,000+/hour would not be an extraordinary fee for the lead partner on the matter.

forgotAgain• 13 years ago

The $70k / week figure given is for the first two weeks. I'm going to jump to a conclusion and say that the first two weeks will be above average in cost due to introductory meetings, posturing on both sides, and generally bringing the process up to speed.

The $1,100 / hour is not out of line for a top law firm. It would be interesting to know what Apple is paying it's outside attorneys. The claim that the figure is "higher than Apple has ever encountered for any task" is clearly untrue. Apple has payed it's own executives much more in the past.

rpedela• 13 years ago

I think it is implied that "any task" means "any legal task". $1100/hour is definitely the highest I have ever heard of for a lawyer, much higher.

kumarm• 13 years ago

How About Apple publishing their lawyer fees to prove $1100/hour is high?

Not going to happen. Why?

Zigurd2• 13 years ago

Two high-profile lawyers and three others for 40 billable hours per week comes to a about $350/hr on average. Assuming the the two top lawyers are billed at at around $500/hr, it's probably less than 40 billable hours/week, and the rest of the team is fairly priced.

Apple seems to be posturing.

hkhanna• 13 years ago

The highest paid lawyer that I have ever met bills $1600/hr. Ted Olson is a famous former Solicitor General. He argued Bush v. Gore and the recent Proposition 8 case. He now works for a major national law firm in their DC office.

Kind of funny to think when he looks at a clock for 2 seconds, that's $1 right there. But he's highly experienced and a very good appellate litigator. You wouldn't hire him unless it was high stakes litigation and the legal fees were little compared to what you might lose in a judgment against you.

bound008• 13 years ago

Any task in this case means any hourly pay. Employees and executives don't get paid hourly. Executives don't have a task to complete.

malandrew3• 13 years ago

I don't understand why, if they are footing the bill, that they are required to hire a top tier law firm. This is a government granted monopoly to someone who was not selected via a competitive bidding process. The government should provide Apple a list of acceptable, competent attorneys who can do this work and let Apple work out the details.

jljljl• 13 years ago

>> The government should provide Apple a list of acceptable, competent attorneys who can do this work and let Apple work out the details.

That seems like it would create an obvious conflict of interest. The attorney in question is responsible for ensuring that Apple is complying with the anti-trust ruling. If Apple could directly choose the attorney, there would be an incentive for the attorney to be lax with ensuring compliance.

DanBC4• 13 years ago

Bromwich’s bill for his five-person team’s first two weeks of work: $138,432

To be fair, that's only $27,686 each per fortnight. Assuming 50 hour work weeks, that's only $276 per hour.

As always, check my arithmetic.

138432 / 5 people = 27686.

27686 / 100 hours = 276.

That's not far off a run of the mill family lawyer in England. (Without barristers and court fees.)

dvanduzer• 13 years ago

You should read the complaint. The hourly rate is explicitly $1100/hr for Bromwich, and $1025/hr for his staff. Apple's legal team uses the number from the bill for two weeks in order to compare it to a judge's typical annual salary.

judk3• 13 years ago

You are assuming 50 hours per week each, all for this one case, not supported by the article

crag• 13 years ago

Please.. what lawyer you know works 50 hours a week? Unless there's an active trial.

gamblor9566• 13 years ago

Most lawyers not employed by the government work more than 60 hours a week on a normal basis. When there is an active trial or court hearing to prepare for, that number usually jumps to 80 hours a week or more. For BigLaw lawyers (i.e., the largest law firms), 80 hours a week is considered a vacation; most of them work at least 12 hours a day every day, including weekends!

The unreasonable workloads and time expectations are one of the reasons that lawyers as a profession are so depressed...and why law school enrollment plummeted so far once the legal market crashed and salaries fell.

DanBC4• 13 years ago

Billable hours. They cram 'em in.

vonskippy• 13 years ago

How awful, Apple breaks the law and then whines about the pocket change ($70K x 52wks x 2years = $7.3M) charge for enforcing it's own compliance.

If Apple thinks $70K/week is high for lawyers, wait until they get the overage bills from their new HQ building contractors.

kevrone• 13 years ago

I really don't care about Apple's problems. Apple can take care of itself.

gress9• 13 years ago

First they came for Apple...

joshuamerrill• 13 years ago

Is it worth mentioning that on top of the $1,100 hourly rate for Bromwich, and the $1,025 hourly rate for the assisting law firm, Fried Frank, he's also demanding a 15% "service charge"? From page 23:

"And Mr. Bromwich’s rates in this matter dramatically exceed what he has quoted in the past. For instance, in a proposal to monitor the New Orleans Police Department five months ago, he suggested a $495 hourly rate, without an administrative fee, which the Department of Justice termed 'relatively expensive.'"

DannyBee3• 13 years ago

Usually in these situations, lawyers give high rates expecting the judge to knock it down. Judges always (rightly or wrongly) think lawyers are being paid too much, and often just halve the rate or whatever. This is often true regardless of what number is given.

So if you don't want to end up being ordered by a court to work at 25% of your actual market rate, you often have to give exorbitant numbers.

victorbstan• 13 years ago

I'm sorry, I don't see how anyone should be defending a lawyer's fees at that price. I look at law the way I look at open source software, (the law should be accessible to everyone, for free, if they know how to interpret it). You can hire experts in law, as you hire experts in open source software (lawyers/programmers). Now imagine, for example, two startups competing with on the same technology (say Rails (whatever)) in the same market (whatever). Now imagine one of the two startups wins a dominant market position and the other has to fold. You don't imagine the developers of the winning startup demanding some arbitrary fee from the company they beat. It would seem absurd. Yet here are people defending thousands of dollars an hour, for a human being to interpret the law, which is the same for everyone and should be accessible to anyone (even though we all know navigating the legal system is probably worse than navigating through WordPress source code). I don't see how a lawyer on the opposing team should be able to charge me an arbitrary amount.

MaysonL2• 13 years ago

The price Mr. Bromwich is demanding is a sideshow. The real objection Apple has is that what he demands, and the judge proposes to give him, is not within her power to grant. All that a special master is allowed to do is what the court is allowed to do, and what the parties consent to. Apple isn't consenting to anything beyond its legal obligations. It is not in the judge's power to interview witnesses alone, without their counsel present if desired. Apple's main complaint is that Bromwich is trying to act as a prosecutor, rather than as a representative of, or substitute for, the judge

x0054• 13 years ago

So, Apple has to pay Bromwhich $1,265/hr ($1,100/hr + 15%) to oversee the antitrust compliance and then, additional $1025/hr to the outside counsel who would consult Bromwhich on the relevant Antitrust law.

All this because Bromwhich admits that he has NO antitrust experience. So, why was he chosen in the first place?!?!

Say I show up at your firm, get hired as a senior C++ developer. Then on the first day I show up, and tell you: "You know how you are paying me $X/hour to do this job. Yeah... You know, I don't actually know how to do this job, but John here does. He's going to be working "with" me. So, in addition to $X/hour for me, you'll need to pay John here $X/hour as well. Yeah..., so will get started now, right?"

linuxhansl• 13 years ago

"it doesn’t matter if you think my fees are reasonable, because you don’t get to negotiate them: You just pay them"

Nice. Spoken like a true lawyer.

How did legal fees get so high anyway? Do lawyers perform a task more skillfull than (say) software engineers? It seems under $350/h a lawyer won't move a finger. Software engineers do not (typically) make $350/h.

Also it looks like high lawyer fees are at least partially a US phenomenon.

caycep• 13 years ago

Honestly, I don't think Apple so much as broke the law as they lost out on some lobbying/regulating play where Amazon got the DoJ to investigate for agency models, as opposed to Apple getting the DoJ to investigate Amazon for predatory pricing.

In this case, I think anything is fair play.

smackfu• 13 years ago

Wonder how much Apple paid their lawyers to write this brief and if they actually come out ahead even if they win.

Apple Doesn’t Want to Pay the Feds’ E-Book Lawyer $70,000 a Week

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