BigLaw Partner’s Hourly Billing Rate of Nearly $2,500 Draws Objection from Trustee in Bankruptcy

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Lawyer’s remuneration

BigLaw Partner’s Hourly Billing Rate of Nearly $2,500 Draws Objection from Trustee in Bankruptcy

Neal K. Katyal, Partner at Hogan Lovells and former Acting United States Solicitor General. Photo by Department of Justice, PD US DOJ, via Wikimedia Commons.

A US bankruptcy trustee opposes hiring a Hogan Lovells partner who would charge nearly $2,500 an hour to handle calls in a Johnson & Johnson subsidiary’s Chapter 11 case.

The trustee said the billing rate of $2,465 an hour charged by partner Neal K. Katyal is significantly higher than the highest rates of seven other law firms working on the case for the unit Johnson & Johnson, according to Bloomberg Law and Reuters. Katyal is a former Acting United States Solicitor General.

The rate of $2,465 could be a new high in the legal industry, according to Reuters. The highest billing rates approved by other companies “hit the $2,000 mark in the past year,” the article said.

According to the trustee’s May 20 objection, other companies’ highest billing rates include $1,450 at Jones Day; $1,875 at Skadden, Arps, Slate, Meagher & Flom; $1,795 at Weil, Gotshal and Manges; and $1,750 at Orrick Herrington & Sutcliffe. The actual rates charged by the litigating firms, however, have so far been lower ($1,350 at Jones Day, $1,195 at Skadden and $1,579 at Weil).

The trustee filed an opposition in the bankruptcy of LTL Management. Johnson & Johnson created the subsidiary and assigned it tort liabilities stemming from lawsuits alleging that Johnson & Johnson’s talc products caused cancer. The move is known as “Texas Two-Step.”

Johnson & Johnson has set aside $2 billion to pay for the lawsuits.

Many plaintiffs have appealed a February ruling that Johnson & Johnson could use the derivative unit to resolve cancer claims in bankruptcy, according to Reuters.

The 3rd Court of Appeals for the U.S. Circuit in Philadelphia has agreed to hear multiple appeals alleging the bankruptcy was filed in bad faith, Bloomberg Law reported.

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