Minnesota Lawyer Blog

As some commenters point out on an earlier post, a Hennepin County jury yesterday awarded $1.6 million to a lawyer, Brian Williams, who sued his old firm, Heins Mills & Olson in Minneapolis, over how it divided a massive fee.

The firm collected a $103 million fee in a securities fraud case, of which firm partners Sam Heins and Stacey Mills (who are also husband and wife) pocketed collectively $80 million. Williams, who already received $4.5 million, sought more from both his ex-firm and former partners Heins and Mills. The jury sided with Williams.

Both sides tried to spin the result their way. The lawyer for the firm pointed out that Williams sought much more than $1.5 million he got. However, any case where an individual walks away with more than $1 million is hard not to score as a win for the plaintiff.

We have not covered this case much -- primarily because the Strib has been on top of it like white on rice. (So much so that that the judge actually postponed the trial at one point due to the "unflattering" publicity.) Here's a link to the Strib story on the verdict.

Considering that good faith on the part of insurance companies has been so much in the news lately, a recent opinion from U.S. District Court Judge James Rosenbaum merits a mention. In Babinski v. American Family Insurance Group, the judge refused the insurer’s attempt to limit its exposure to a fraction of the policy limits and socked it with a hefty attorney fee award of $35,712.33.

Donald Babinski’s son and daughter-in-law were killed in an auto accident when the son was driving Babinski’s truck. The daughter-in-law’s estate sued the son’s estate, of which Babinski was the personal representative. Donald Babinski had purchased $1 million in insurance coverage from American Family.

After sending a letter acknowledging the existence of liability coverage, American Family later argued that it had to pay only a maximum of $30,000 under a “household exclusion” or “drop-down exclusion.” Rosenbaum quickly disposed of the so-called household exclusion, whereby the policy arguably would not cover any person related to and residing in the household of the operator of the car, observing that Minnesota has held such exclusions invalid since 1979.

He also declined to enforce the drop-down exclusion, which would exclude coverage over the liability limits required by law, and mean the insurer was responsible for only 3 percent of the policy’s face value. Rosenbaum said the insurer used “stealth language” and the policy was vague, ambiguous, misleading and fell far below any ordinary consumer’s reasonable expectation. “This is a $1 million policy, and so it shall remain,” Rosenbaum ordered.

Becoming a lawyer in Minnesota is about to become a slightly spendier proposition.

The Minnesota Supreme Court Monday approved a petition by the state Board of Law Examiners regarding fees related to admission to the state bar, effective Jan. 1.

For new lawyers, the cost of taking the bar exam will be $500, up from $400; for applicants missing the filing deadline, the cost rises from $550 to $650. For lawyers certified in other states and wishing to take the Minnesota bar exam, those fees rise $200 to $950 ($1,100 for late filers).

Also going up are the cost of repeat examinations, and applications for admission without examination. There is good news, though: If you withdraw your application for the bar exam in time, your partial refund rises from $125 to $150.

The increase is understandable, given the dramatic rise in exam applicants recently -- a record 906 this past July. With all the talk about a glut of new lawyers and the shrinking market for attorneys, maybe the fee increases will weed out a handful of folks who were on the fence about practicing law.

For the rest, it might mean grinding out a few extra billable hours in their first year of practice to make up the difference.

The Wall Street Journal blog reports today that some partners at some of the biggest law firms in the Big Apple are now charging their clients $1,000 an hour for legal fees. (Click here for more.)

We at the the Minnesota Lawyer blog don't know exactly what extra level of service you get for this, but hope the price at least includes the cigarette afterward ....

All joking aside, there is a bright side to these lawyers breaking the $1,000 an hour barrier -- the value of their pro bono work just went up.

Several local plaintiffs' lawyers recently set the bar buzzing when they made a highly unusual offer -- they would handle the cases of victims from 35W bridge collapse without taking a fee. (Under a typical fee agreement in a personal-injury or wrongful death case, the client would agree to pay the lawyer anywhere between a third and 40 percent of the amount recovered.)

The offer to take the cases pro bono surfaced not long after it had been announced that the Minneapolis personal-injury powerhouse firm of Schwebel Goetz & Sieben had signed up several bridge-collapse victims as clients. The Schwebel firm is not part of the pro bono effort and will represent its clients pursuant to a standard contingent-fee agreement.

One of the firms spearheading the pro bono effort is Minneapolis-based Robins, Kaplan, Miller & Ciresi, which, ironically, pocketed one of the biggest fees in state history a few years back when it got $440 million for handling the state's $6 billion tobacco settlement. The Robins firm has already signed up several several bridge victims as clients, none of whom it is charging a fee.

The pro bono representation offer has the potential to generate some positive PR for trial lawyers -- or at least avoid some negative PR. There are plenty of individuals out there -- some of whom have already posted on this blog -- poised to cast lawyers as vultures seeking to capitalize on the bridge tragedy.

On the other hand, while it would be easy to criticize the Schwebel firm for not waiving its fee, personal injury lawyers do have a right to make a living. And these are likely to be very complicated cases involving a web of immunity, damage-cap and statute-of-limitations issues. Plus, while what happened to these people is horrific, many individuals who suffer equally terrible injuries or deaths still have a legal fee extracted from their or their families' recoveries. Why shouldn't we be waiving fees in those cases as well?

I don't have any answers here, but think the situation raises some pretty interesting issues. (Minnesota Lawyer has a full coverage of the pro bono offer in this week's issue.)

Not to get too mired in the 18th Century (how often has that sentence been said?), but my previous post on the Founding Fathers puts me in mind of an excellent lawyer story from the life of Alexander Hamilton. More precisely, the source of this tale for me was Ron Chernow's excellent biography "Alexander Hamilton."

Chernow relates how Hamilton flatly refused the legal business of a certain Mr. Governeur. And just what was Mr. Gouverneur's offense? Hamilton had heard that he had made a disparaging remark about the "attorney-like way" someone had padded his bill.

In a caustic letter, Hamilton told Gouverneur that such behavior "cannot be pleasing to any man in the profession and [that it] must oblige anyone that has proper delicacy to decline the business of person who professedly entertains such an idea of the conduct of this profession."

When was the last time any of us defended the legal profession so vigorously from a quip or a joke? I find myself not quite sure whether what Hamilton did was noble, or whether he just needed to lighten up ...

It's funny what the introduction of money can do to a friendship, isn't it?

A case in point is a Alderson v. Homolka, an unpublished Court of Appeals decision released today involving a fee dispute between two lawyers who were once friends. The fee at issue was generated from a $3.4 million personal injury settlement, which, as you can imagine, might put any friendship to the test.

The two lawyers -- Roger C. Alderson and Daniel M. Homolka -- were solos who sometimes worked together. Alderson, who mostly did workers' comp, helped Homolka,who did a lot of personal-injury work, land the lucrative case. He also performed some of the grunt work, but was not named in the fee ageement. Homolka argued that Alderson's work was worthless to the case and he wasn't entitled to anything.

The trial court judge disagreed, awarding Alderson $100K on his quantum meruit claim. The Court of Appeals affirmed.

File this one under "Ex-Friends With Money."