DOVER, Del.--(BUSINESS WIRE)--Today, Citizens for a Pro-Business Delaware slammed Chancery Court-appointed TransPerfect Custodian Robert Pincus and Skadden, Arps after an independent audit from billing expert David Paige, Esq. of Legal Fee Advisors revealed a widespread pattern of massive overbilling over the past 13 months, a small sample size in a Custodianship that has been ongoing for 6 years.
Paige, a member of the Professional Responsibility Committee of the Association of the Bar of the City of New York, who has lectured extensively on the subject of legal fee billing found that Skadden routinely charged TransPerfect for expenses that are not commonly subject to reimbursement under legal and commercial standards including “Attorney work meals,” “Word Processing Time,” and “Overtime Meals.” Stunningly, Skadden charged TransPerfect over $156,000 in such fees. As Paige highlights, “it is my assumption that the Firm compensates its professional staff sufficiently to allow them to feed themselves without subsidy from the firm’s clients. Certainly, one would assume that such timekeepers would need nourishment regardless of whether they were working on this matter.”
According to Paige, Skadden charged excessive billing rates that were 3 times greater than average market rates and engaged in two disfavored billing practices commonly known as “block billing” and “pattern billing.” Skadden charged on average $1426 per hour for their partners ($623.00 above market rate ) and $1,066.00 for their associates ($602.07 above market rate) and charged TransPerfect nearly $168,000 in pattern billing (or “duplicative entries”) which is the practice of using repetitive, virtually identical language (seemingly word processed) in billing entries so that the entry may not accurately represent the actual time spent or specific description of work completed on a given day. As Paige notes, legal authorities and commercial standards dismiss Pattern Billing as unreasonable. Skadden further charged a shocking $1,835,047.08 in blocked billing which represent task entries that are grouped together with other task entries without providing either time or cost for such tasks rendering objective analysis all but impossible.
In total, Skadden is now charging TransPerfect an additional $3 million in fees on top of the $15 million charged over the past 5 years, much of which, according to Paige’s report, should be reduced due to billing improprieties. In the 13-month period analyzed by Paige, he recommended a whopping reduction of $1,804,125.74, or 56% of the total fees charged by Skadden during this period. This massive overbilling has meant millions of dollars has been diverted from everyday hardworking TransPerfect employees, cutting into their healthcare benefits and bonuses.
Said Citizens for a Pro-Business Delaware Campaign Manager Chris Coffey, “Once again, Skadden has demonstrated their utter disregard for common commercial standards of ethics and reasonableness when it comes to the millions of dollars they’ve billed to TransPerfect. While this report only shows what’s been happening for the past 13 months, one can only imagine the millions of dollars that Skadden had improperly deposited into their coffers from TransPerfect over the last 6 years. Notwithstanding that TransPerfect has tried to get these bills reduced over the years it is notable that Chancellor Bouchard, a former partner at Skadden has never once lowered, let alone questioned these obviously inflated bills. Once Skadden got their tentacles into TransPerfect, it was forced to cut healthcare benefits, stock options and bonuses for its employees while being forced to pay Pincus and Skadden millions of dollars. Charging $156,000 for meals and other non-billable expenses is disgraceful and unless these out-of-touch, elite lawyers are eating caviar every day, the numbers don’t add up. This state-sanctioned heist must be investigated and rectified. Bad actors like Skadden Arps are a huge black eye for Delaware and can’t be above the laws they purport to know so well.”