“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.”
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."