Apple Objects to $138,432 Legal Fee for Two Weeks of Antitrust Monitoring

Apple Objects to $138,432 Legal Fee for Two Weeks of Antitrust Monitoring

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Apple has filed an objection to the fees charged by Michael Bromwich, a monitor appointed by the court to oversee its antitrust compliance following the e-books trial, reports Bloomberg.

“Of all known past Apple matters,” no lawyer has had a higher rate than Michael Bromwich’s proposed hourly fee of $1,100, said Apple in a November 27th filing. “Mr. Bromwich appears to be simply taking advantage of the fact that there is no competition here or, in his view, any ability on the part of Apple, the subject of his authority, to push back on his demands.”

Bromwich, who is a former U.S. Justice Department inspector general, is also charging a 15% administrative fee on top of his hourly rate and on the cost of hiring additional lawyers to assist him. Bromwich says the administrative fee is justified because he's handling the assignment through his consultancy, the Bromwich Group, rather than through his law firm, Goodwin Procter LLP.

The total invoice for two weeks of work amounted to $138,432. Apple notes that the fee is about 75% of a federal judge's annual salary and that the administrative surcharge is “unprecedented in Apple’s experience.”

Update:
Documents obtained by AllThingsD reveal that Apple has been refusing to schedule requested interviews with Bromwich, making only two out of fifteen persons available to interview. The company has also been slow to provide documents it's required to provide, treating the monitor as if it were a consultant. "Apple has sought for the last month to manage our relationship as though we are its outside counsel or consultant," said Bromwich.

"In regards to the fees, Bromwich writes to Apple, "First, you assert that the fee structure we have proposed is 'unreasonable for a matter of this size, scope, and type' based on your comprehensive review of past billing practices for law firms working for Apple. Your statistical analysis might be relevant if this matter was in fact comparable to the other matters in your database, but it is not. We have been told by company representatives that Apple has never before had a monitor of any kind, so your review of past matters in which you retained law firms cannot include matters of ' this size, scope, and type' because your database contains no such matters. Further, as we discussed again when we met this part Monday, we are providing you with discounts for our standard rates. Unlike other service providers who discount in the hope that they will obtain further work from Apple, we are quite correctly barred from doing any other work for Apple during the duration of the monitorship and for a year afterwards.

As for your concerns about the 15 percent administrative fee, as we discussed on Monday, the fact is the law firms you deal with charge out their associates at hourly rates that generate profits far in excess of 15 percent; indeed, the markups range from more than 30 percent to well over 100 percent. In that context, a 15 percent administrative and management fee is modest."

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Apple Objects to $138,432 Legal Fee for Two Weeks of Antitrust Monitoring
Dr. Harry J. Maue - December 7, 2013 at 8:35am
Good point be we are addressing the hourly rate not aggregate fees and expenses and the general additude that the lawyer has expressed his views in his appointment. I was a bit surprised by the arrogance seems to me he should keep his opinions to himself and the judge should tell him to keep a quite. Hopefully common sense will prevail and this chap will be subject to eirher some type of oversight or replaced with a company that does this type of work reasonably without any outside help. Respectfully submitted. STUART/MAUE Saint Louis, Missouri.
piggypigs - December 7, 2013 at 7:05am
on the other hand .. they paid their own lawyer 60 million in one lawsuit ...
Dr. Harry J. Maue - December 2, 2013 at 2:32am
You would think that would be the case but this situation appears to be different from what we are used too. The idea behind appointing a fee monitor is not to appear to be taking advantage of your appointment you should be above such reproach and not express an attitude that pay up and shut up you have no input regarding our appointment. There are a lot of questions surrounding this appointment first why was the appointment outside the monitor's own law firm why do you need help to monitor the fees and not to mention the expenses ( which are never addressed )and markups on outside contractors and this 15% administrative fee very confusing. My company has been a fee appointed monitor for over 20 years and we have never such things plus our rate is $395 per hour because we look at our role as being part of a solution to control legal fees and expenses and never be a part of the problem as it appears in this case. I hope I am not coming across as self-serving because whether you appoint our company or another reputable fee examination company I feel that the client has been served and all parties should benefit from this type or professional service. This case is not an isolated situation because a similar scenario is taking place right now in the City of Detroit bankruptcy. We can only hope that this case and future such cases will be handled with a little more care for all parties.
Dr. Harry J. Maue - December 1, 2013 at 6:51am
I believe Apple is correct in their assertion that these fees should be challenged as no company should be forced to pay any fees and associated expense without the benefit of full documentation. As the founder of the legal auditing profession almost 30 years we have assisted companies and judges in the review of legal fees and documented expenses in order to ascertain whether or not they are in full compliance with the courts billing protocols and a myriad of court cases. We apply all these rules and protocol's using experienced lawyers and forensic accountants to assure all parties that these fees and expenses are reasonable as they apply to these guidelines. It is something that needs to be done immediately before the finger pointing and negative commentaries get any more prolific.
Question - December 1, 2013 at 5:10pm
Since you actually posted an intelligent and relevant comment, and you seem familiar with the subject, I have a question: since the monitor was court-appointed, wouldn't the fees also have been approved by the court ahead of time? It seems unlikely that a monitor would be given carte blanche to charge whatever they wanted in this kind of situation, and that such a matter wouldn't be dealt with simultaneously with the appointment itself. Usually in these scenarios (like in chapter 7's) if the monitors get cute, it's not with the fees themselves but with the hours billed.
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