Moneybox

Washington Post Discovers That Elizabeth Warren Was Paid a Reasonable Fee for Providing Legal Services to Unobjectionable Clients

FAIRFAX, VIRGINIA - MAY 16:  Democratic U.S. presidential hopeful Sen. Elizabeth Warren (D-MA) waves during a campaign town hall at George Mason University May 16, 2019 in Fairfax, Virginia. Sen. Warren held a town hall to tell her plans for Americans and answer questions from voters.  (Photo by Alex Wong/Getty Images)
Elizabeth Warren, who charged clients for her legal expertise.
Alex Wong/Getty Images

Over the course of her career as a law professor, Elizabeth Warren was regularly hired to represent clients or consult on lawsuits. Most of the work involved bankruptcies, a subject on which she was considered a leading national expert. This sort of freelancing is basically standard in the legal academy, and even encouraged; after all, who wants to take courses from a pointy headed prof who never actually sets foot in court?

On Wednesday, Warren released a long rundown of her private legal work with a bit of uplifting framing: “Elizabeth was one of the nation’s top experts on how to make sure victims hurt by bankrupt companies eventually got paid. Throughout her career, she worked to help set up trusts and other mechanisms to return $27 billion to victims and their families.“

The Washington Post, which appears to have been digging around on this issue separately, responded with an article headlined: “While teaching, Elizabeth Warren worked on more than 50 legal matters, charging as much as $675 an hour.” The story leads off similarly, foregrounding the the $675 figure. The implication seems to be that Warren was cashing in or something, which is a bit odd. I mean, here’s where they got the figure:

In a separate review, The Washington Post found that a wave of Warren’s legal work came in the early 2000s as manufacturing companies whose products contained asbestos were forced into bankruptcy by waves of personal injury claims.

A nationally recognized expert in bankruptcy law, Warren consulted for more than a dozen committees representing claimants and creditors in these cases, often in partnership with the law firm Caplin & Drysdale, for an hourly rate of $675.

In human speak, that translates to the following: A lot of people got cancer from asbestos products and sued the manufacturers, which declared bankruptcy. The victims’ lawyers then hired Warren as a consultant in cases where they ultimately set up compensation funds. That is … pretty unobjectionable, especially considering the kinds of legal work some of her Harvard colleagues took on. I mean, Alan Dershowitz helped his billionaire buddy Jeffrey Epstein secure a sweetheart plea deal after he was accused of preying on underage prostitutes.

And what about the fee? Some on Twitter—myself included at first—thought it actually seemed a bit low (we now live in a time where top attorneys can rake in $2,000 an hour). Was Warren being underpaid?

Turns out she was not being lowballed. In 2002, The New York Times reported that billing rates for elite law partners in New York were approaching $700 an hour. According to a National Law Journal survey from 2001, hourly billing rates reached above $600 at just 14 law firms. The Justice Department determined that a “reasonable” fee for an attorney with at least a decade of experience in 2000 was $305 per hour (that’s according to the Laffey Matrix, which is used in cases where one party recovers legal costs from another). Consultants like Warren and expert witnesses sometimes earn a higher rate than lead partners on a case, but the bottom line seems to be that she was compensated like a top legal professional for the time.

It’s possible that some of Warren’s other legal work might raise questions—though it’s hard to tell from the Post’s review. She seems to have helped set up a victims’ compensation fund on behalf of Traveler’s Insurance that the company later wriggled out of having to distribute. (She told the Boston Globe that she hadn’t seen that coming.)There was also a case that pitted her against the future president of the AFL-CIO, though he later backed her Senate campaign.

But anyway, Warren appears to have made money by charging clients like asbestos victims an acceptable hourly rate practicing law. Scandal!