There is embarrassment for DLA Piper this morning after emails emerged in a US court case which show the world's largest law firm's lawyers joking about how much they are charging a client. It is one of the first times that documentary evidence has been found about the possible creation of unnecessary work to inflate a client’s bill.
“I hear we are already 200k over our estimate – that’s Team DLA Piper!” wrote lawyer Erich Eisenegger (who now works for McDermott Will & Emery) in one of the emails.
Referring to a colleague also working on the matter, another DLA lawyer, Christopher Thomson (who has also since left the firm), stated: "Now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode. That bill shall know no limits."
The internal correspondence came to light after it was disclosed in a fee dispute between DLA and energy industry executive Adam Victor. The dispute began when DLA sued Victor for unpaid legal bills. Victor then filed a counterclaim accusing the law firm of a "sweeping practice of overbilling".
The New York Times has the full story.
UPDATE 27 March 4.15pm: DLA responds
DLA says the comments were nothing more than "an unfortunate attempt at humor by three former lawyers of the firm." The firm adds: "It is unfortunate that the unprofessional behavior of these lawyers by writing those emails has distracted attention away from the fact that a client refused to pay his bills, and is now being exploited by a party in litigation for their own advantage."
The full DLA response is below:
DLA PIPER — MEMORANDUM — OVERBILLING ALLEGATIONS
As many of you know, The New York Times published an article today that focuses on inappropriate emails written by three former lawyers of the firm, referencing improper billing practices.
The actions described in this story did not happen. These emails reflect an unfortunate attempt at humor by three former lawyers of the firm, but did not result in overbilling to the client. It is important to emphasize that the client was not overbilled for any service, but instead was billed in an amount consistent with an understanding reached with the client relating to the amount of fees to be incurred in connection with the services rendered by the lawyers involved in the matter. In fact, by virtue of being a plaintiff in a collection proceeding, it was anticipated that DLA Piper’s services and bills would be reviewed in a judicial process and by a trier of fact for reasonableness and accuracy, and we continue to believe that the DLA Piper fees subject to our collection proceeding will be determined to be appropriate and fair. As such, it is unfortunate that the unprofessional behavior of these lawyers by writing those emails has distracted attention away from the fact that a client refused to pay his bills, and is now being exploited by a party in litigation for their own advantage.
We have no doubt that many of you will be engaged in a conversation with existing and/or potential clients about the inappropriate email humor and we believe it important to convey the following points:
– The emails were in fact an offensive and inexcusable effort at humor, but in no way reflect actual excessive billing. Instead, the reality of the matter is that the amount of fees billed by DLA Piper are consistent with the work performed.
– DLA Piper as a firm has always adhered to the highest level of ethics and integrity in all of its work, including billing practices. We take great pride in being recognized repeatedly by clients as providing the highest level of quality and cost-efficient service.
– As you know, our bills and billing practices undergo the most sophisticated reviews and audits by clients who employ such techniques as a standard practice in connection with outside counsel billings.
In closing, while we will make no effort to defend the foolish emails generated by the lawyers involved in this matter, we will defend vigorously the firm’s track record of delivering high-quality legal services at a fair price, including the reasonable fees generated in the matter in question. Thank you for your continued support.
Image by Elmira College via Flickr on a Creative Commons License