

Apple Doesn’t Want to Pay the Feds’ E-Book Lawyer $70,000 a Week - TinyBig
http://allthingsd.com/20131129/apple-doesnt-want-to-pay-the-feds-e-book-lawyer-70000-a-week/

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forgotAgain
The $70k / week figure given is for the first two weeks. I'm going to jump to
a conclusion and say that the first two weeks will be above average in cost
due to introductory meetings, posturing on both sides, and generally bringing
the process up to speed.

The $1,100 / hour is not out of line for a top law firm. It would be
interesting to know what Apple is paying it's outside attorneys. The claim
that the figure is "higher than Apple has ever encountered for any task" is
clearly untrue. Apple has payed it's own executives much more in the past.

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rpedela
I think it is implied that "any task" means "any legal task". $1100/hour is
definitely the highest I have ever heard of for a lawyer, much higher.

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kumarm
How About Apple publishing their lawyer fees to prove $1100/hour is high?

Not going to happen. Why?

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kanzure
Because then competitors know how much of Apple's time they have to waste (in
court) to produce a certain amount of Apple legal expenses.

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criley2
Any competitor with the clout the "punish" Apple, getting them to fold,
already pays as much or more than Apple for their own team.

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rayiner
This article provides more context: [http://allthingsd.com/20131017/apple-
gets-its-e-book-antitru...](http://allthingsd.com/20131017/apple-gets-its-e-
book-antitrust-monitor)

"Together, Bromwich and Nigro will oversee Apple’s internal antitrust
compliance policies and employee training on them for the next two years."

$1,100 an hour is not an unusually high fee for internal investigations work,
nor does $70,000 per week seem unusually high for an ongoing compliance
investigation and policy restructuring of an organization as large as Apple.
This sort of work usually involves getting down into the weeds and looking at
how even fairly low-level employees go about their jobs. The going rate for
this sort of work tends to be pretty high, because companies who hire law firm
to do an internal investigation tend to be in a pretty tight spot.

~~~
toomuchtodo
This is the first time I've heard someone try to explain an extortionate
hourly rate as "reasonable fees".

Would the argument be the same if a private firm was charging the government
at the same rate? Or would we be here with pitchforks demanding answers?

~~~
icelancer
>Would the argument be the same if a private firm was charging the government
at the same rate? Or would we be here with pitchforks demanding answers?

Have you looked at attorneys' fees for this kind of work? $1,000/hr is not
unreasonable whatsoever. My friend isn't even a partner in an IntProp firm
(just a five year associate) and he is billed out at $650-700/hr for the most
basic of tasks.

~~~
colechristensen
Because it's being done does not make it reasonable. There is no world in
which $1000/hr is a reasonable fee for any human being to do any work.

~~~
gamblor956
You're not paying for the work, you're paying for the expertise regarding
knowing what work needs to be done. Moreover, you're paying one of the best
lawyers in the country the _market rate_ for his time and effort, which he
could just as easily earn working to oppose monitoring efforts.

You've probably heard this story before:

 _One day, Pablo Picasso was sketching in the park when a bold woman
approached him.

“It’s you — Picasso, the great artist! Oh, you must sketch my portrait! I
insist.”

So Picasso agreed to sketch her. After studying her for a moment, he used a
single pencil stroke to create her portrait. He handed the women his work of
art.

“It’s perfect!” she gushed. “You managed to capture my essence with one
stroke, in one moment. Thank you! How much do I owe you?”

“Five thousand dollars,” the artist replied.

“B-b-but, what?” the woman sputtered. “How could you want so much money for
this picture? It only took you a second to draw it!”

To which Picasso responded, “Madame, it took me my entire life.”_

~~~
EGreg
For a valid contract Picasso should have stated his rates upfront.

Also, it's not exactly the free market hiring thia compliance firm. Where is
the competition for his services ready to pay $1k an hour? And demanding to
intervieq all the famous bigshots? I think the complaint is valid whether or
not they win.

~~~
gamblor956
_For a valid contract Picasso should have stated his rates upfront._

The contract is valid if the woman accepts it; a valid contract doesn't
require that the rates be stated upfront so long as the terms are disclosed
and consented to by both parties.

 _Also, it 's not exactly the free market hiring thia compliance firm. Where
is the competition for his services ready to pay $1k an hour?_

The other market participants for his services are other potential clients who
would otherwise incur his time. Michael Bromwich works for Goodwin Proctor in
the White Collar and SEC compliance groups.
[http://www.goodwinprocter.com/People/B/Bromwich-
Michael.aspx](http://www.goodwinprocter.com/People/B/Bromwich-Michael.aspx)
(Goodwin Proctor is one of the biggest law firms in the world.) His client
base consists of multinational conglomerates and multi-billion dollar
companies, most of whom would gladly pay $1000/hour or more to avoid criminal
sanctions and other penalties that could run into the tens or hundreds of
millions.

 _And demanding to intervieq all the famous bigshots? I think the complaint is
valid whether or not they win._

His job is to ensure compliance. He does this by interviewing those in charge
of complying, i.e., the CEO and any executives overseeing the relevant company
divisions to make sure they have taken, or are in the process of adopting,
steps to ensure compliance. According to the monitor, those in charge of
complying have thus far evaded most of his meeting requests, so it is
necessary for him to keep issuing meeting demands until they actually agree to
meet with him.

The alternative is for him to get into the nitty gritty by auditing Apple's
corporate and business-line practices. This is a far more involved job, which
would entail a significantly higher billing rate (mostly for additional staff,
not his own personal billing rate), significantly more time spent and billed,
and a significantly greater disruption to Apple's business activities.

~~~
DannyBee
"The contract is valid if the woman accepts it; a valid contract doesn't
require that the rates be stated upfront so long as the terms are disclosed
and consented to by both parties."

Actually, it depends on the type of contract, and where in the world you are.

In the US, UCC contracts don't require a price term, but other contracts do.
Since UCC does not cover services contracts, Picasso's contract would have
required a price term, or some other show of consideration.

In the specific case of lawyers, most states require fee agreements that state
prices up front in writing.

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carbocation
If Apple were forced to pay the State $70,000 per week, I don't think this
would be an issue. I do find it uncomfortable that the State is forcing Apple
to transfer wealth to another private party without any (obvious) oversight.

~~~
dnautics
moreover the private party's flippant attitude is really distressing. i'm no
fan of Apple, but this has now become an abuse of power, whether or not the
actual financial costs are reasonable.

~~~
growse
If someone questioned why I should be paid market rate for my expertise, I'd
probably have a flippant attitude as well. _Especially_ if they should know
better, like Apple should.

~~~
dnautics
it's not a market rate when the agent deciding the rate is the state.

~~~
growse
Ok, semantic point. 'Comparable with the expected market rate'.

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joshuamerrill
Is it worth mentioning that on top of the $1,100 hourly rate for Bromwich, and
the $1,025 hourly rate for the assisting law firm, Fried Frank, he's also
demanding a 15% "service charge"? From page 23:

"And Mr. Bromwich’s rates in this matter dramatically exceed what he has
quoted in the past. For instance, in a proposal to monitor the New Orleans
Police Department five months ago, he suggested a $495 hourly rate, without an
administrative fee, which the Department of Justice termed 'relatively
expensive.'"

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vonskippy
How awful, Apple breaks the law and then whines about the pocket change ($70K
x 52wks x 2years = $7.3M) charge for enforcing it's own compliance.

If Apple thinks $70K/week is high for lawyers, wait until they get the overage
bills from their new HQ building contractors.

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DanBC
> Bromwich’s bill for his five-person team’s first two weeks of work: $138,432

To be fair, that's only $27,686 each per fortnight. Assuming 50 hour work
weeks, that's only $276 per hour.

As always, check my arithmetic.

138432 / 5 people = 27686.

27686 / 100 hours = 276.

That's not far off a run of the mill family lawyer in England. (Without
barristers and court fees.)

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crag
Please.. what lawyer you know works 50 hours a week? Unless there's an active
trial.

~~~
gamblor956
Most lawyers not employed by the government work more than 60 hours a week on
a normal basis. When there is an active trial or court hearing to prepare for,
that number usually jumps to 80 hours a week or more. For BigLaw lawyers
(i.e., the largest law firms), 80 hours a week is considered a vacation; most
of them work at least 12 hours a day every day, including weekends!

The unreasonable workloads and time expectations are one of the reasons that
lawyers as a profession are so depressed...and why law school enrollment
plummeted so far once the legal market crashed and salaries fell.

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DannyBee
Usually in these situations, lawyers give high rates expecting the judge to
knock it down. Judges always (rightly or wrongly) think lawyers are being paid
too much, and often just halve the rate or whatever. This is often true
regardless of what number is given.

So if you don't want to end up being ordered by a court to work at 25% of your
actual market rate, you often have to give exorbitant numbers.

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MaysonL
The price Mr. Bromwich is demanding is a sideshow. The real objection Apple
has is that what he demands, and the judge proposes to give him, is not within
her power to grant. All that a special master is allowed to do is what the
court is allowed to do, and what the parties consent to. Apple isn't
consenting to anything beyond its legal obligations. It is not in the judge's
power to interview witnesses alone, without their counsel present if desired.
Apple's main complaint is that Bromwich is trying to act as a prosecutor,
rather than as a representative of, or substitute for, the judge

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linuxhansl
> "it doesn’t matter if you think my fees are reasonable, because you don’t
> get to negotiate them: You just pay them"

Nice. Spoken like a true lawyer.

How did legal fees get so high anyway? Do lawyers perform a task more
skillfull than (say) software engineers? It seems under $350/h a lawyer won't
move a finger. Software engineers do not (typically) make $350/h.

Also it looks like high lawyer fees are at least partially a US phenomenon.

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freehunter
Does all of that $1100/hr go to Bromwich, or is it payed to the federal
government (or the company that pays Bromwich) who then pays Bromwich some
percentage of that? We've had contracts at work for $80,000/yr where the
contractor only saw $50,000 of that. The rest was payed to the company he
worked for.

If the entire sum isn't going to Bromwich or if the court agrees with the
price he's charging, I'd chalk it up to being the price you pay for anti-trust
behavior. Then again, I don't know how much a company should pay for
compliance monitoring after being convicted of anti-trust behavior. Either way
it _is_ a lot of money, but if it's not all going to Bromwich's pockets, it
sounds like a fine being imposed for the duration of the anti-trust
monitoring.

~~~
judk
Assessing a fine, paid to govt or restitution is one thing. Mandating an
extorntionate contract , payable to the judge's buddy, is another.

~~~
freehunter
That's exactly the differentiation I tried to raise in my point. Is this a
fine paid to the government who then pays the lawyer some percentage, or is
all of this money going to the lawyer? One would be acceptable, the other
would be less so.

~~~
judk
From what I read, it is the legal fees from "privatized" complance monitoring.

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victorbstan
I'm sorry, I don't see how anyone should be defending a lawyer's fees at that
price. I look at law the way I look at open source software, (the law should
be accessible to everyone, for free, if they know how to interpret it). You
can hire experts in law, as you hire experts in open source software
(lawyers/programmers). Now imagine, for example, two startups competing with
on the same technology (say Rails (whatever)) in the same market (whatever).
Now imagine one of the two startups wins a dominant market position and the
other has to fold. You don't imagine the developers of the winning startup
demanding some arbitrary fee from the company they beat. It would seem absurd.
Yet here are people defending thousands of dollars an hour, for a human being
to interpret the law, which is the same for everyone and _should_ be
accessible to anyone (even though we all know navigating the legal system is
probably worse than navigating through WordPress source code). I don't see how
a lawyer on the opposing team should be able to charge me an arbitrary amount.

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RexRollman
Although I supported the anti-trust action taken against Apple, I have to say
that agree with them in regards to these ridiculous charges.

~~~
craigyk
On top of that, from what I read, he regularly demands meetings with Cook,
Ive, etc. Seems like the actions of someone on a power trip.

~~~
DanBC
Sir Jonathon Ive is senior vice president of design, and is listed as an
executive, and was considered to be Jobs's "spiritual partner at Apple".

Look at the placement of Ive here
[http://www.apple.com/pr/bios/](http://www.apple.com/pr/bios/)

When a company fucks up, and is caught, and has court ordered scrutiny, it
seems reasonable that the executives are going to be scrutinised.

The way to avoid this scrutiny is to avoid breaking the law.

~~~
quesera
That's ludicrous.

Ive is an industrial designer, recently tasked with some UI work. His
relevance to anything ebook related is less than zero.

Cook is in charge, so he has to show up sometimes, sign off on SOX paperwork,
etc. The entirety of Apple's compliance effort is managed by someone else, but
every project needs a Responsible Individual.

~~~
jasonlotito
> His relevance to anything ebook related is less than zero.

By Ive's own admission, this is false.

~~~
quesera
Mea culpa. Google fails me, please elaborate.

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x0054
So, Apple has to pay Bromwhich $1,265/hr ($1,100/hr + 15%) to oversee the
antitrust compliance and then, additional $1025/hr to the outside counsel who
would consult Bromwhich on the relevant Antitrust law.

All this because Bromwhich admits that he has NO antitrust experience. So, why
was he chosen in the first place?!?!

Say I show up at your firm, get hired as a senior C++ developer. Then on the
first day I show up, and tell you: "You know how you are paying me $X/hour to
do this job. Yeah... You know, I don't actually know how to do this job, but
John here does. He's going to be working "with" me. So, in addition to $X/hour
for me, you'll need to pay John here $X/hour as well. Yeah..., so will get
started now, right?"

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kevrone
I really don't care about Apple's problems. Apple can take care of itself.

~~~
gress
First they came for Apple...

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smackfu
Wonder how much Apple paid their lawyers to write this brief and if they
actually come out ahead even if they win.

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caycep
Honestly, I don't think Apple so much as broke the law as they lost out on
some lobbying/regulating play where Amazon got the DoJ to investigate for
agency models, as opposed to Apple getting the DoJ to investigate Amazon for
predatory pricing.

In this case, I think anything is fair play.

