Law firms tackle effort to ditch hourly fee
Large-entity suits most likely cases
Several big Orlando law firms plan to abandon hourly fees — in which attorneys bill clients for every minute of research, or just to write a letter or take a phone call — for anyone trying to sue a large corporation.
“I think more and more now, sophisticated businesspeople are looking for flexible arrangements and more accountability from their legal team,” said David Oliver, who started as the new head of Gray-Robinson’s commercial contingency law practice.
Oliver came from Orlando-based Morgan & Morgan, which also waded into the new fee arrangement for commercial lawsuits about two years ago.
“I think in 25 years, this model of hourly billing, on Wall Street — the business community is not really going to have the tolerance for it,” Oliver said.
Some in the profession think that attorneys working on contingency will create a free-for-all of new types of litigation.
Mayanne Downs, president of Gray-Robinson, said certain types of lawsuits could increase, and some corporations should fear that. Overall, though, she doesn’t think they’ll be frivolous cases, and some types of legal expenses could drop and enable savings to be passed on to the consumer.
“Our courts are smart enough to address meritless cases, and they will get tossed out, and you could be penalized for filing it. The truth is, there are good cases out there that don’t come to light, because people just can’t afford to sue,” Downs said.
The billable hour is neither dead nor dying, according to Eric Seeger, a writer and principal with Altman Weil, a legal management consulting firm.
“It’s clear that non-hourly billing, also known as ‘alternative fee agreements,’ can serve clients’ increasingly pressing demands for more predictable legal expenses,” Seeger wrote in an article for the American Bar Association. He also said that there is immense push-back in traditional firms when it comes to abandoning the predictable hourly fee.
The risk of suing based on contingency has become common enough that some Miami lawyers last year started Level Insurance, which pays some of a law firm’s costs if it does wind up losing.
That news prompted defense attorney Mark Rose in Deerfield Beach to comment in an article at Law.com that alternative fee arrangements could encourage riskier suits or more complex cases.
Downs said the firm is all-in on running a sustained and regular commercial contingency practice.
“We don’t make decisions to hire new lawyers and start new practices lightly,” Downs said. “I think John Morgan was onto something when he started his practice there. It requires a delicate, nuanced balance of skills. It gives our clients more options.”
Oliver, at GrayRobinson, specializes in suing large corporations on contingency. That means he doesn’t get paid unless he wins the case. Taking a risk on the fee has not been common in corporate law, with a few exceptions such as class-action cases in which attorneys sue a wealthy target on behalf of hundreds of people. But the legal profession has been moving slowly toward more flexible fees.
One of Oliver’s recent cases is suing Universal Orlando over its new attraction and dessert shop, The Toothsome Chocolate Emporium & Savory Feast Kitchen. Although Oliver declined to talk about specific case-fee arrangements, he said all of his work recently has been focused on contingency.
In that case, Oliver represents Ohio resident Adam Limle, who alleges that the concept for the restaurant was actually his, and that he met with Universal executives for months to explain his concept. Universal hasn’t responded publicly to the allegations yet.
Oliver said another prime area for contingency fee cases would be environmental litigation.
“We like David-versus-Goliath cases, but we also like Goliath-versus-Goliath,” he said.
Oliver started building a team of lawyers at Morgan & Morgan to work on contingency. The Morgan firm was an interesting place to start, being one of the largest personal-injury firms in the nation, he said. Morgan previously told the Orlando Sentinel he planned to add 50 lawyers in the commercial trial area during the next five to six years.
But GrayRobinson represents a more traditional firm that still has a statewide footprint. Oliver said GrayRobinson has the necessary teams of attorneys with expertise in areas such as tax law, corporate law and probate court, to make a broader commercial contingency practice work. Oliver also has worked at such firms as Carlton Fields, Greenberg Traurig and Baker Hostetler.
“I spent 25 years living life by the billable hour,” Oliver said. “When they see they’re up against another hourlyrate firm, they immediately think about the billing, about wearing out the opposition . ...
“No other profession rewards the professional for inefficiency and overstaffing, without any adjustment for result ... . ”
Morgan & Morgan is still heavy on the personal-injury cases through which it made its name, but Morgan said, when he launched his firm’s practice, that he thinks the size of his firm positions it to tackle commercial contingency cases.
The Morgan firm is still handling contingency cases, led by Damien Prosser and Ben Webster, who previously worked for Oliver.