TYLER, Texas (Legal Newsline) - May 15 was a busy day for Reid Martin and Jack Walker. The name partners at the Tyler, Texas-based Martin Walker law firm each billed 14.5 hours at $750 an hour, for a total of $21,750, to review lawsuits six Texas counties were preparing to file against opioid manufacturers and distributors that day.
The next day, they each turned in 10-hour days, billing five more counties $15,000 to review their opioid suits.
Yet lawyers at Simon Greenstone, a larger Dallas law firm that also represents the counties, charged as little as $160 to draft and file the same complaints Martin and Walker charged $3,000 or more to review. Those complaints were all nearly identical, with only the names of the suing counties changed.
Jeffrey Simon of Simon Greenstone
The bills from Texas opioid lawyers are theoretical so far, since virtually all of the private lawyers have contingency fee contracts with counties under which they get a percentage of anything they win. If the counties win nothing, the lawyers get nothing.
But in many cases, the Martin Walker partners charged more just to review opioid complaints on a single day than Simon Greenstone charged to represent the same counties for nearly a year. The Tyler lawyers charged Panola County on the Louisiana border, population 23,000, $10,312 through July 17 including $2,063 for Martin to travel to a commissioner’s court meeting before the firm was hired and $3,750 for Martin and Walker to review the complaint drafted by Simon Greenstone. Simon Greenstone billed $792 over the same period, including $158 to draft the complaint.
How can two law firms charge such wildly different rates for the same services? The bills appear to fit a pattern seen in other cases involving multiple law firms in which some firms have close ties to the plaintiffs and others handle the grunt work of litigation, such as drawing up complaints and handling pretrial motions.
Ethics rules in nearly every state prohibit lawyers from collecting so-called “bare referral fees” for making introductions to clients, so plaintiff firms often try to spread billable hours among themselves to ensure they earn their fees in compliance with the rules.
Sometimes those arrangements involve eyebrow-raising practices. In one highly publicized case involving State Street Bank & Trust in Boston, securities class-action firm Labaton Sucharow steered $4.1 million in fees to a Houston lawyer who did no work on the case but served as an intermediary with officials at Labaton’s client, an Arkansas state pension fund.
In that case, another firm with close ties to the Massachusetts legislature “borrowed” lawyers from Labaton and another big firm to run up billable hours, rather than hiring its own attorneys.
Walker says his bills in the opioid cases aren't actually bills, but technically time records. But these records are still important.
After a scandal erupted over the $3.2 billion in fees politically connected lawyers won in the state’s lawsuit against the tobacco industry in 1998 – a scandal that ultimately sent former Texas Attorney General Dan Morales to prison -- Texas legislators passed comprehensive regulations governing private lawyers working for public entities.
Under those regulations, private lawyers must maintain contemporaneous billing records reflecting the work they’ve done for their government clients, and the counties must provide those records to the public when asked.
Billing records for more than 30 Texas counties offer a unique window into the practices of lawyers chasing after what could be the biggest fee bonanza since Big Tobacco.
The Texas billing records consistently show local firms that made marketing presentations and convinced county officials to hire their team have so far billed the most, even if their bills largely reflect receiving and reviewing documents instead of drafting them.
Smaller firms involved in Texas opioid litigation may have an incentive to produce large bills to ensure they get what they consider their fair share of fees that will flow from any settlements or judgments.
Under Texas law, to get paid by a public client, law firms must submit a so-called “lodestar” report showing how many hours they expended on the case. The ultimate fee they earn is the lower of the contingency fee or the lodestar times a multiple of up to four to compensate the lawyers for the risk of not getting paid.
In Rusk County, the Love Law Firm, based in the county seat of Henderson, billed $14,105 through Dec. 8, including $3,000 to prepare for and travel to a Rusk County commissioner’s meeting in October 2017, months before the county filed suit.
Love also billed $4,500 for “research – legal, socioeconomic and available healthcare information” on Oct. 25, 2017. Five days later an identical entry, for the same amount, appears on Love’s invoice to neighboring Panola County. Love declined to comment on whether the research was specific to each county.
Most Texas counties initially refused to release billing records, or cited costs of up to $750 an hour for the private lawyers to vet them and redact sensitive information. After those costs were challenged at the Texas Attorney General’s Office most of the counties relented and provided the records for free. They bear few redactions.
If the Texas opioid litigation does result in big settlements, the rewards will flow to a relatively tight group of politically connected lawyers. Dallas County is represented by Simon Greenstone; Mark Lanier, an asbestos lawyer prominent in Republican Party politics; and the law firm founded by the late Johnnie Cochran. And the Southeast Texas Record revealed earlier this year that former Bexar County District Attorney Nico LaHood took in $110,000 in campaign contributions from lawyers he hired to represent the county in opioid litigation, before losing the subsequent election.
Plaintiff lawyers appointed to the panel coordinating multidistrict litigation within Texas courts represent a Who’s Who of political heavyweights including Dara Hegar, a managing attorney with the Lanier Law Firm who’s married to Texas Comptroller Glenn Hegar, the official in charge of vetting contingency fee contracts between private lawyers and public entities.
Other lawyers on the steering committee include Tommy Fibich, a Houston lawyer and heavy contributor to a local political action committee that supports Democratic candidates; and Mike Gallagher, whose Houston law firm has contributed more than $1 million to Republican and Democratic candidates in recent years.
Walker, while more of a local player, is secretary/treasurer of the Texas Trial Lawyers Association, gave $25,000 to the organization’s political action committee in 2018 and was an enthusiastic supporter of unsuccessful Democratic U.S. Senate Candidate Beto O’Rourke.