Kramer Levin Gets Rude Awakening on Fee Claim

     MANHATTAN (CN) – A prominent law firm will get a fraction of its “breathtaking” $3 million fee request, a federal judge ruled, saying the original demand went “beyond the pale.”
     In late August, U.S. District Judge William Pauley III allowed the Upper East Side’s Mark Hotel to keep a $4.68 million deposit paid by the ex-wife of a software executive, who ditched her “absolutely fabulous” luxury suite when she found out it lacked basic utilities.
     The ruling granted “reasonable attorney fees” to the hotel’s lawyers at Kramer Levin Naftalis & Frankel LLP, a powerhouse firm with offices in New York, Silicon Valley and Paris.
     Pauley found Thursday that the firm misunderstood the term “reasonable” in requesting $3.16 million.
     “Astonishingly, Kramer Levin attorneys, paralegals, and staff amassed 5,536.4 billable hours on this matter, employing four partners, three special counsel, ten associates, eight paralegals, and a summer associate,” the seven-page order states.
     Pauley insisted that he wanted to avoid airing the firm’s dirty laundry in his public filing.
     “This court has conducted a thorough and mind-numbing review of Kramer Levin’s billing records,” he wrote. “To avoid undue embarrassment to a fine law firm like Kramer Levin, this court declines to recapitulate that review in this opinion. Suffice it to note that it is highly unlikely that anyone at Kramer Levin actually reviewed the time records before hitting the print button and compiling them as exhibits. Such a review would have uncovered, among other things, problematic entries.
     “Just a few examples should make the point that the hours billed are far beyond what was commercially reasonable or appropriate. For instance, a Kramer Levin staff member billed $230 for ‘deliver[ing] [a] letter to Judge Holwell at SDNY.’ … But Judge Holwell had nothing to do with this case. And a Kramer Levin partner billed $390 for work described in its entirety as ‘Misc items.’ … The court could go on.”
     And the court does go on, one sentence later:
     “Just as disturbingly, two Kramer Levin partners who were fact witnesses in the litigation billed more than $22,000 preparing and sitting for their depositions,” Pauley wrote. “These hours are not billable.”
     “But that is more than enough detail,” Pauley concluded. “As a concession to the mortality of judges, the law does not require a line-item review.”
     A straightforward real-estate dispute should not take the equivalent of 230 sleepless days and nights to prepare and litigate, the judge noted.
     “Fifty-five hundred hours was an unreasonable amount of time to spend on this matter,” the order states. “This case involved a residential real estate dispute. The legal and factual issues, while hotly contested, were neither novel nor complex.”
     Pauley added that he did not denigrate the firm’s work by reducing its fees to $475,000.
     “This court does not fault Kramer Levin’s work in this case,” he wrote. “Both Kramer Levin and Campbell’s counsel performed admirably throughout the proceedings. But [its] fee request is beyond the pale.”
     Kramer Levin managing partner Paul Pearlman said its fee request was justified.
     “We have great respect for Judge Pauley, but we disagree with his decision concerning our legal fees and expenses,” Pearlman said in a statement. “The matter involved a dispute over millions of dollars, and the series of factual and legal issues raised by the plaintiff throughout the matter required extensive defense work. As a result, the litigation lasted almost three years and required a trial to resolve the dispute. Accordingly, we believe that our staffing and our services were both necessary and reasonable to ensure the outcome received, which was a complete victory for our client.”

%d bloggers like this: