Legal Fee Voyeurism: Gawking At Gawker's Lawyer Bills
The embattled media company has hired high-priced talent to help it through its troubles.
Embattled Gawker Media, the prominent digital media company that’s currently mired in bankruptcy and litigation, has hired some top legal talent to help it through its troubles. And these lawyers and law firms, despite some discounts, don’t come cheap.
Here’s a report from Peter Sterne of Politico Media, who has been covering the trials and tribulations of Gawker more closely than anyone:
In a series of motions filed on July 25, Gawker asked the bankruptcy court for permission to pay the five different law firms that are representing it in various lawsuits. While requesting authorization to pay Cahill Gordon & Reindel LLP — the law firm representing Gawker and [former Mail Online employee James] King in the Mail Online defamation suit — it mentioned that it’s close to a settlement in the case….
According to the motion, Gawker paid Cahill about $157,000 in the 90 days before it declared bankruptcy (on June 10) and owes the firm another $87,000. Going forward, Gawker plans to pay hourly rates of $800 for partners and $332 – $588 for associates. That’s a nice discount from Cahill’s normal hourly rates of $920 – $1,140 for partners and $416 – $735 for associates.
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Charging $1,000 an hour used to be a big deal (see, e.g., this 2007 piece I wrote for the New York Times). Today, where some partners charge $2,000 an hour, for $1,000 an hour is something of a bargain.
Cahill, home of legendary First Amendment lawyer Floyd Abrams, is one of the best media litigation firms in the country. And the same can be said for the next firm we’re about to mention:
Gawker also asked the court for authorization to pay four other law firms — renowned First Amendment law firm Levine Sullivan Koch & Schulz LLP, Florida law firms Thomas & LoCicero PL and Brannock & Humphries, and Gawker’s corporate counsel JB Duncan PC….
Gawker has paid the most money to LSKS. In the 90 days before bankruptcy, Gawker paid LSKS more than $3.6 million for its work on the Hogan trial and four other lawsuits against the company. Going forward, Gawker plans to pay LSKS hourly rates of $515 for senior partners, $490 for partners and counsel, $330 – $445 for associates and $215 for paralegals. That’s about a 20 percent discount from the firm’s normal rates.
Ordinary Americans might be shocked to hear this, but again, that’s a tremendous value. Levine Sullivan is a top media litigation shop, and to get a senior partner for the price of a fairly junior Biglaw associate is a steal. No wonder many clients are turning from Biglaw to boutiques.
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But wait, the rates can get even better, once you leave New York City:
Gawker paid Thomas & LoCicero (which handled jury selection in the Hogan trial) about $248,000 in the 90 days before bankruptcy and currently owes the firm another $10,000 or so. Gawker isn’t getting a discount from Thomas & LoCicero and plans to pay the firm’s standard hourly rates of $320 – $495 for partners, $215 – $230 for associates and $170 for paralegals.
Gawker paid Brannock & Humphries (which specializes in appeals) about $175,000 in the 90 days before bankruptcy, owes about $7,000 and has a retainer with the firm of about $17,000. It plans to pay discounted hourly rates of $400 – $475 for partners, $215 for associates and $140 for paralegals.
Check out the bios of the lawyers at Thomas & LoCicero and Brannock & Humphries; you’ll see seasoned and successful attorneys. And Gawker is getting them for under $500 an hour. It seems that you can get great litigators in the Sunshine State for a half to a third of what Biglaw litigators in NYC charge. (Good news for the Adelson family and their bevy of high-profile defense lawyers.)
Now let’s go back to Biglaw. Gawker is being represented in bankruptcy by Ropes & Gray, which is charging a pretty penny:
Gawker’s most expensive law firm is Ropes & Gray, which is representing it in the bankruptcy proceedings. Gawker paid a $300,000 retainer to Ropes & Gray before declaring bankruptcy and is currently paying Ropes & Gray’s standard hourly rates of $880 – $1,450 for partners, $605 – $1,425 for counsel, $460 – $1,050 for associates and $160 – $415 for paralegals.
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And its adversaries have similarly impressive counsel:
A committee of Gawker’s creditors — made up of [Hulk] Hogan, Ashley Terrill and Shiva Ayyadurai, who are all suing Gawker and all represented by attorney Charles Harder — filed a motion asking for authorization to hire the corporate law firm Simpson Thacher & Bartlett LLP to represent them in the bankruptcy proceedings. The creditors plan to pay Simpson Thacher’s standard hourly rates of $1,085 – $1,315 for partners, $1,030 – $1,065 for counsel, $485 – $995 for associates and $205 – $350 for paralegals.
Query whether Simpson Thacher’s bills are being covered by tech billionaire Peter Thiel, who bankrolled the litigation filed by wrestler Hulk Hogan against Gawker that took the company into bankruptcy.
UPDATE (3:15 p.m.): It seems the official committee’s fees to Simpson should come out of the bankruptcy estate, assuming the committee’s request to retain STB is granted, but individual creditors might have to pay their own fees.
The troubles of Gawker have some media companies running scared. But from the perspective of lawyers, “it’s not personal, it’s strictly business” — good business.
Disclosure: I worked briefly at Gawker Media for a few months in 2006, back when Gawker owned Wonkette, and ATL Redline, an ATL spinoff site, uses Gawker’s Kinja platform.
Gawker close to settlement with Mail Online in defamation suit [Politico Media]
David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@abovethelaw.com.
