The Litigation Industry – Some Big Numbers from Big Problems, Such as Lehman, Chevron- Ecuador
"Big law" – and litigation boutiques – love large problems because they create many years of work. Indeed, the problems sometimes create far more revenue than myriad deals. Three examples popped up today, with two of them in AmLaw’s Litigation Daily.
A story on Lehman’s bankruptcy notes that professional fees paid by the estate (not all to lawyers) are now up to $1.5 billion. The big winner is New York and some of its law firms, such as Weil, with Lehman estate billings of $ 375 million and Milbank with Lehman estate billings at $ 133 million.
Then there is a story on Chevron’s increasingly desperate bid to avoid paying an $ 18 billion judgment for polluting Ecuador and creating cancers. Chevron filed a "privilege log" listing the lawyers and law firms it has used for for various aspects of the litigation. According to the story:
"In a recent discovery filing, Chevron disclosed that it is employing no fewer than 39 law firms in the Ecuador matter (including four law firms representing the related individual defendants, but not including non-U.S. counsel retained in connection with potential enforcement actions). By the Ecuadorian plaintiffs’ count (which we did not verify), Chevron employs close to 500 outside lawyers or paralegals to counter their claims.
Among the 39 law firms listed are 15 Am Law 100 firms—Akin Gump; Ballard Spahr; Boies, Schiller, Crowell; Gibson Dunn; Holland & Knight; Jones Days; King & Spalding; Mayer Brown; Nutter McClennen; Pillsbury; Schulte Roth; Skadden; Sonnenschein; and Steptoe—and four smaller firms that qualify for the NLJ 250."
Finally, there is a Reuters story on Western MacArthur and insurance coverage battles over its asbestos losses. The latest story is a New York appellate court opinion confirming an award of $ 420 million for Travelers and against reinsurers. The ruliing is the latest step in a journey that dates back at least as far back as Western suing Travelers for coverage – in 1993. No doubt there were negotiations before the start of the 1993 litigation. So, two decades and many lawyers and law suits to deal with just one part of an insurance portfolio for one asbestos defendant.
Conclusion? The litigation industry will continue to expand for as long as short-term thinking continues to create large, long-term problems.