NY High Court to Hear UNCONSCIONABLE Fee Case (MORE, CLICK HERE)

NY Firm Accused of Billing "Unconscionable" Fee Faces Day in High Court
February 13, 2008 -New York Law Journal By Anthony Lin

The Court of Appeals will hear a case in which a law firm is accused of foisting an "unconscionable" contingent fee arrangement on a client months before the settlement of her case.

The Appellate Division, First Department, last week granted leave to appeal to Alice Lawrence in her lawsuit against Manhattan law firm Graubard Miller, which represented her for over two decades in litigation over the estate of her late husband, real estate developer Sylvan Lawrence.

In her suit, Ms. Lawrence, 83, sought recission of a January 2005 agreement to pay Graubard Miller 40 percent of a $105 million settlement reached in May 2005. Ms. Lawrence had argued that the contingent fee was "an unconscionable and excessive amount as a matter of law" because the firm sought the arrangement near the end of the litigation rather than at the beginning.

She had previously paid the firm some $18 million in hourly bills, with three individual partners additionally requesting "gifts" totalling $5 million.

In a 4-1 decision last November, Justices Richard T. Andrias, David Friedman, George D. Marlow and Eugene Nardelli ruled that Graubard Miller's fee arrangement was not unconscionable on its face and that further proceedings exploring the parties' understandings would be needed to determine its propriety. But, in a blistering dissent, Justice James M. Catterson, said no court could condone such an excessive fee, regardless of the parties' discussions.

Graubard Miller, represented by Mark Zauderer of Flemming Zulack Williamson Zauderer, has argued that Ms. Lawrence was a sophisticated client who knowingly entered the fee arrangement at issue.  Ms. Lawrence is represented by Leslie D. Corwin of Greenberg Traurig.