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Source: http://abovethelaw.com/2008/07/wilmer_sued_for_12_million.php August 30, 2008 - content has not been altered. Links have been removed.

Lawsuit of the Day: McAfee Sues WilmerHale for Alleged Overbilling At issue: $12 million in legal fees. Tuesday, July 22, 2008 9:12 AM - By David Lat No, there's no decimal point missing. Computer virus fighter McAfee Inc. wants to quarantine the legal fees of WilmerHale, alleging that the firm overbilled the company. It finds WilmerHale's $12 million bill to be simply unacceptable. From Niraj Chokshi of The Recorder:

The Santa Clara, Calif., company is embroiled with Wilmer, Cutler, Pickering, Hale and Dorr over $12 million in legal fees incurred in the trial of former McAfee Chief Financial Officer Prabhat Goyal. The company is accusing WilmerHale of fraud, theft, negligence and breach of fiduciary duty. "[WilmerHale] intentionally overworked and churned the representation of Goyal; shamelessly employing over 100 WilmerHale timekeepers in the feeding frenzy," McAfee alleged in a complaint filed in the Eastern District of Texas earlier this year. "Defendant's bills reflect at least 16 partners, 34 associate attorneys, 10 legal assistants and 49 staff personnel -- how else could they amass this enormous trove of cash?" the complaint read.

On the one hand, $12 million is a sizable chunk of change. Did William DiSalvatore bill time to this matter? On the other hand, big cases are, well, big. And part of the reason you hire Biglaw shops to tackle them is the ample supply of warm bodies to throw at the problem. Racking up an eight-figure legal bill is not unheard of in a long-running, large-scale white collar case involving top corporate executives. More after the jump. Here is Wilmer's side of the story:

WilmerHale wants the complaint dismissed, explaining in a statement issued Monday that the lawsuit is "no more than a pretext to avoid its advancement duties to Mr. Goyal." In 2002, the Department of Justice began what would become a three-year investigation into McAfee's accounting practices, according to WilmerHale's motion to dismiss the lawsuit. Goyal was charged with accounting fraud and convicted by a San Francisco jury in May 2007. In its latest motion to dismiss, filed Thursday, WilmerHale noted that the case required the production and review of 1.2 million documents.

That's a lot of documents. Does Wilmer have staff attorneys? We do know they hire a fair number of contract attorneys for large litigation matters.

Martin Rose, the Dallas lawyer representing McAfee in the fee dispute, alleges in his latest complaint that WilmerHale, which brought in East Coast lawyers to represent Goyal in a San Francisco trial, charged almost $200,000 in expenses for luxury hotel rooms, limousines and charges for room service and bar tabs. The software company described WilmerHale as "unrepentant in its greed."

C'mon, Mr. Rose, you're a lawyer, you know better -- drop the faux indignation. We're talking Biglaw. This is how they roll. (Seriously, for a case that went to trial, $200K in expenses does not seem unreasonable. Sometimes firms take over an entire luxury hotel in connection with a trial. Don't expect them to stay at the Motel 6.) More in defense of WilmerHale:

Paul Yetter, the Houston lawyer representing WilmerHale in the fee dispute, said by e-mail Monday that "over 80 percent of the defense work was done by two lead WilmerHale partners and a handful of associates. The bulk of other timekeepers were needed for review of 1.2 million documents in the case." He stated that the fees were in line with similar cases, including the backdating trial of Brocade Communications CEO Gregory Reyes. Yetter, of Yetter, Warden & Coleman, also provided a statement from WilmerHale that said its fees "reflect legal services that were necessary and reasonable in a lengthy and complex matter encompassing five separate cases, particularly one in which Mr. Goyal's very liberty is at stake. Indeed, the California judge commended the firm's efforts as 'extremely well-tried.'"

Wilmer has a number of other arguments in support of its motion to dismiss, including some more technical ones. Read the rest over here. Update / Clarification: In response to some questions raised in the comments, $12 million is roughly the total tab -- not the amount of the alleged overbilling (although McAfee's lawsuit does call for Wilmer to forfeit most of the $12 million). From the WilmerHale motion to dismiss: "Goyal's defense costs for the civil and criminal proceedings arising out of the accounting investigation have exceeded $12 million." We have revised the title of this post to remove any ambiguity on this score.