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What profit? I gave up $10 million

November 19, 2006|Burt Neuborne | Burt Neuborne is the Inez Milholland professor of civil liberties and legal director of the Brennan Center for Justice at the New York University School of Law.

ATTACKS ON ME for seeking a court-awarded fee for seven years of labor as the lead lawyer in the $1.25-billion Swiss banks Holocaust settlement give new meaning to the phrase "no good deed goes unpunished."

I began my work on behalf of Holocaust survivors in December 1996, when U.S. District Judge Edward R. Korman asked me to serve as counsel in the Swiss banks litigation. I redrafted the complaints, wrote the principal legal brief, argued the case and spearheaded the negotiations that succeeded on Aug. 12, 1998, in obtaining the historic settlement. I then told Korman that although I was entitled to as much as $10 million, I would not seek a fee for those services. At that point, no one expected me to do more work on the Swiss banks case. Instead, beginning in September 1998, I devoted myself to the German slave labor cases that led to the creation of the $5.2-billion German Holocaust Foundation.

In April 1999, Korman asked me to return to the Swiss banks case to carry out the complex settlement. Given the grueling, time-consuming nature of the work, he agreed that I would be entitled to reasonable hourly fees. Korman has publicly acknowledged that he "retained me" and that I am entitled to a fee. My detractors say Korman should have given formal notice that I was no longer working for free. But notice to a class of 1 million people would have cost a fortune (it cost $40 million to give notice of the terms of the settlement) while accomplishing nothing because the class was not entitled to insist that I return to work for them for free.

My work as lead settlement counsel over the last seven years has been massive and unrelenting, requiring me to spend, to date, more than 7,000 hours providing complex legal services to the settlement fund. I appeared in 30 contested legal proceedings, including multiple federal appeals, two Supreme Court proceedings and three trial-type hearings in the district courts.

In fact, my work increased the fund by almost $100 million because I persuaded Congress to exempt all interest on the $1.25-billion fund from federal income taxation. Thus far, more than $900 million has been distributed from the Swiss settlement fund to about 400,000 people -- more than $400 million to Swiss bank account owners, averaging $130,000 per account; more than $300 million to former slave laborers, with each recipient receiving $1,450 from the Swiss fund plus $7,500 from the German Holocaust Foundation; $205 million for the relief of the poorest survivors; $15 million to refugees expelled from Switzerland; and a $10-million grant to Yad Vashem (Israel's Holocaust Martyrs' and Heroes' Remembrance Authority) to compile a definitive list of all Holocaust victims. I anticipate that hundreds of millions of dollars in additional bank account claims will be paid.

Thus, my requested fee of about $4.75 million, based on the usual hourly billing rate for similar services, works out to about $10 per recipient, payable entirely from the tax-free interest earned on the settlement fund. Because of my work, even after all fees and expenses are paid, the survivors will receive more than 100% of the $1.25-billion settlement.

The charge that I misled the class into thinking that I was working for nothing is baseless. It was occasionally legally necessary for me to note that my pre-settlement work had been without fee. Unfortunately, some survivors claim to have misunderstood those statements. They claim to have believed that I was working without a fee during the post-settlement phase.

While I deeply regret any misunderstanding, Judge Korman and my co-counsel have made it clear that virtually everyone involved in the case understood that I was to be compensated for my post-settlement work.

I worked extremely hard for two years and generated $1.25 billion for survivors. I waived a fee of up to $10 million for that work. That's enough charity. There comes a point where no one can expect a lawyer to continue to work indefinitely without being paid.

In the real world, unless lawyers are paid fees that reflect the market value of their services, they cannot be expected to commit themselves to years of demanding work.

But for my work, there would have been no money to distribute to anyone. Given my years of dedication to the survivor community, and my success in assembling and distributing more than $6.5 billion to Holocaust victims over the last decade, I do not apologize for seeking a reasonable market fee for my years of successful service in the Swiss banks case.

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