It’s an estimate, but perhaps not all that far-fetched: In some cases, lawyers suing the tobacco companies could make as much as $100,000 an hour if the cozy contingency fee deals they have signed with state attorneys general and others are left intact.
     
That helps explain why some in Congress are pressing to add curbs on lawyers’ fees to the $515 billion tobacco bill sponsored by Sen. John McCain, R-Ariz.

In Texas, five leading plaintiffs lawyers would split a pot of $2.3 billion over the next 25 years — 15 per cent of a $15.3 billion statewide settlement — under a contingency fee deal signed by Democratic state Attorney General Dan Morales for a lawsuit to recover health care costs attributable to tobacco.

The five lawyers did not keep track of the hours they worked. Nor have they specified how much of the money they would share with the dozens of other lawyers who helped them. But professor Lester Brickman of Benjamin Cardozo Law School, an expert witness in a court challenge brought by Texas’ Republican Gov. George W. Bush against the fee deal, says the lawyers’ hourly rates come to at least $92,000, based on his estimate that they almost surely put in no more than 25,000 hours on the cases.

In Florida, West Palm Beach Circuit Judge Harold J. Cohen invalidated as "unconscionable" a deal that would give the state’s 12 lead private lawyers $2.8 billion — 25 per cent of a similar, $11.3 billion statewide tobacco settlement. But his decision was overturned on May 18, on procedural grounds, and sent back for further action.

The total cut for the plaintiffs lawyers in all current and future tobacco cases covered by the McCain bill could run as high as $5 billion a year, with the biggest bucks coming from future class action suits on behalf of sick smokers and their families.

The plaintiffs lawyers and their champions — one of them Sen. Ernest F. Hollings, D-S.C. — make no serious efforts to knock down the numbers. In fact, they dismiss the dollar figures as irrelevant. "Don’t give me this billable hours or $180,000 an hour or $5 an hour or whatever it is," Hollings declared in a May 19 debate. "This isn’t any hourly thing…. They deserve every dime of it and more."

Hollings was speaking against an attempt by Sen. Lauch Faircloth, R-N.C., to amend the McCain bill by capping the anti- tobacco lawyers’ fees at $250 an hour. Faircloth’s rider was rejected, 39-58. The bipartisan majority’s objections were essentially these:

Don’t mess with the marketplace. Congress does not curb the gargantuan compensation packages of, say, tobacco executives, other corporate fat cats, actors or star athletes. So why should it selectively restrict the fees of the entrepreneurs of litigation — especially those who take on Big Tobacco?

Contract rights. Any move by Capitol Hill to override contingency fee deals would interfere with the lawyers’ contract rights. "A deal is a deal," in the words of Sheldon Schlessinger, one of the Florida lawyers pressing for a full 25 per cent cut.

States’ rights. In the many cases in which attorneys general and other state officials have retained private lawyers to sue tobacco companies, federal fee-capping legislation would interfere with the states’ rights to sign whatever contingency fee deals they chose.

They deserve big fees. The plaintiffs’ lawyers are entitled to generous rewards because they took extraordinary risks — which even state governments could not take on their own — and used their expertise, financial resources and entrepreneurial flair to bring to their knees the mighty tobacco companies, which until recently had seemed invincible.

$250 is not enough. While it may seem a princely wage to most people, $250 an hour is barely half the rate tobacco companies and other corporate clients pay their highest-priced lawyers. And those lawyers are paid whether they win or lose. Contingency fee lawyers, on the other hand, get nothing when they lose. So when they win, they should get more — far more, in some cases — to compensate for their risks.

This last point is so clearly, well, on the money, that by itself it warrants rejection of Faircloth’s $250-an-hour cap, which smacked of standard conservative Republican lawyer bashing.

But what about a fairer, more realistic curb on fees in tobacco cases covered by the McCain measure? Brickman — a leading scholar on contingency fees and a fierce critic of excessive ones — proposes an upper limit of $2,000 an hour, several times the rates charged by the tobacco companies’ lawyers.

Although some of the points noted thus far could be raised against a $2,000-an-hour fee cap, the counterarguments seem more persuasive.

Don’t mess with the marketplace? Precious little evidence suggests that many contingency fee lawyers engage in the kind of competititon for business that is the essence of a healthy marketplace — perhaps because most smokers and other individual plaintiffs don’t have the time or expertise to bargain or shop around for better fee deals.

And even some of the fee deals signed by presumably astute state attorneys general, such as Dan Morales, seem remarkably unsophisticated (at best), with the same fixed percentage of the award going to the lawyers no matter how large the award. Noting that Morales (like many other politicians) got campaign contributions from some of the same lawyers, Bush and Brickman have suggested that he either sold out or was snookered or both. (Morales, returning the fire, has called Bush a lackey of the tobacco companies.)

Be that as it may, the McCain bill would not leave much freedom in any corner of the tobacco marketplace. It would subject tobacco products, advertising and litigation alike to pervasive federal regulation, in a manner somewhat analogous to the government’s Medicare and Medicaid systems, which of course impose strict limits on doctors’ fees.

The McCain measure would also make winning a lawsuit against tobacco companies far easier (by superseding key state tort law rules), while at the same time giving the companies strong financial incentives to offer plaintiffs generous settlements rather than fighting tort suits and class actions all the way to trial. For a Congress that would thus be enriching both plaintiffs and their lawyers — by eliminating much of the risk of litigation and enabling them to win with relatively little effort — it would be a bit odd to ignore the matter of how much money the lawyers should be able to take off the top.

Contract rights? As fiduciaries, lawyers everywhere are subject to ethical rules barring them from charging "excessive" or "unreasonable" fees. So Brickman’s proposed fee cap would clash with the contract rights of only those who can show that they can reasonably demand more than $2,000 an hour.

Individual lawyers should be free to try to make such a showing, on a case-by-case basis, and, if they are successful, obtain an exemption from the $2,000-an-hour cap. But few would (or should) succeed. And a requirement that lawyers present justifications in court for such exceptionally high fees would have the wholesome effect of spurring judges to put teeth into the seldom-enforced ethics rules against unreasonable fees.

States’ rights? The McCain bill would virtually take over — at the behest of the states themselves — the pending state lawsuits to recover tobacco-related costs incurred by combined state-federal Medicaid programs. In this context, on what basis could any state official object to attaching a $2,000-an-hour fee cap, especially one that would benefit the state’s citizens?

While some opponents of any fee cap assert that the main beneficiaries would be the merchants of death (aka the tobacco companies), it seems more likely to affect only the split between the merchants of litigation (aka the trial lawyers) and their clients — the states themselves, smokers and others.

Do the lawyers really deserve more than $2,000 an hour? Many surely do not, because their risk of loss has diminished, and will diminish even more if the McCain bill passes. Fred Levin, a Florida lawyer, helped illustrate this point by boasting on ABC’s 20-20 program not long ago that he not only had brokered the contingency fee deal between the state and its private lawyers for his "good friend" Democratic Gov. Lawton Chiles, but also had made the lawsuit against the tobacco companies "a slam dunk," by slipping through the state Legislature obscure amendments that virtually guaranteed victory to the state.

Not much risk there. Could even so stalwart a champion of the trial lawyers as Sen. Hollings explain why, for such lawyers, $2,000 an hour is not enough?