Peter G. Angelos, who is seeking a fee amounting to $30,000 per hour of attorney time for handling Maryland's tobacco lawsuit, assigned much of the work on the case to novice lawyers supplied by a temp agency that paid them as little as $12 an hour.
Of the 34,000 hours of legal work that the Angelos firm put into the state's case, 7,822 were performed by recent law school graduates supplied by Special Counsel, a national legal services company, billing records show.
The Angelos firm paid Special Counsel $21 an hour for each lawyers it supplied, according to records made public in the fee dispute between Angelos and the state. The temporary help agency in turn paid $12 an hour to each of the lawyers, one of them said.
"It wasn't great pay, but I had just graduated from law school," said Eli Robbins, 28, who was sent to the Angelos firm by Special Counsel from August to December 1998. He reviewed and coded thousands of tobacco industry documents alongside nine other young Special Counsel lawyers in Angelos' office tower at 100 N. Charles St.
Angelos says the hours spent on the case and the payments to temporary lawyers are irrelevant because his contract with the state sets his fee at 25 percent of any money recovered.
"It's a clear-cut contingency fee contract," he said last night. "You can count the hours till you're blue in the face, and it doesn't change that fact."
He excoriated The Sun for reporting the hours and the use of Special Counsel at all, saying the newspaper is biased against him. "I think your newspaper is being intellectually dishonest," he said.
The Angelos firm refused to turn over its time records to the state until it was ordered to do so last month by Baltimore Circuit Judge Clifton J. Gordy. The office of Maryland Attorney General J. Joseph Curran Jr. provided copies, and billing records from Special Counsel, in response to a request from the newspaper under the state's public information law.
The time records are the latest wrinkle in a bitter legal fight between Curran and Angelos, Maryland's top plaintiffs' attorney, majority owner of the Orioles, a leader in downtown redevelopment and major contributor to the Democratic Party.
Angelos contracted with the state in 1996 to handle its lawsuit against the tobacco industry in return for a fee of 25 percent of any recovery. That fee was reduced by the General Assembly to 12.5 percent, a step that Angelos says was not legally valid.
When state tobacco lawsuits were ended by a national settlement in November 1998, the industry agreed to pay the states' lawyers from separate funds so that all $246 billion in settlement money could go to public purposes.
But Angelos, after agreeing to apply for an industry-paid fee, later refused, saying he didn't believe an arbitration panel would give him a fair payment. Instead, he demanded that the state pay him the 25 percent called for in his contract - prompting Curran to file suit against him in December.
Maryland's share of the settlement is more than $4 billion in current dollars over the next 25 years, though the amount could be reduced if cigarette sales decline or tobacco companies declare bankruptcy.
If that doesn't happen, Angelos' 25 percent share would amount to more than $1 billion - or nearly $30,000 for every one of the 34,000 hours that firm records show Angelos attorneys, legal consultants and Special Counsel lawyers worked on the case.
Angelos' lawyer, William F. Gately, said the state could have hired lawyers on an hourly basis, but it did not want to invest the taxpayers' money. Angelos invested thousands of hours of lawyers' time and millions of dollars for an uncertain return, he said.
"The lawyer takes the risk that the case will drag on forever, become the world's biggest tar baby and produce a goose egg," Gately said. "That's why it's outrageous that the state claims hours are relevant in this case."
But Deputy Attorney General Carmen M. Shepard said that under Maryland's rules of professional conduct for lawyers, even a contingency fee must be "reasonable." And the rules state that "the time and labor" expended by lawyers is one of the criteria to be used by judges in deciding whether a fee is reasonable.
Shepard said the overriding issue is Angelos' refusal to apply for an industry-paid fee, which prompted Curran in April to apply for such a fee on Angelos' behalf.
"What has happened is the lawyer has turned on the client," she said. "I guess their theory is it's going to be easier to get money from the state than from the industry. And that's a shame."
Under terms of the tobacco settlement, Shepard said, the state last year was paid $3.2 million by the industry for the 16,993 hours that lawyers and paralegals in the attorney general's office worked on the case - often side by side with lawyers from the Angelos firm.
That works out to an average of $188 per hour of attorney time. The rates of compensation, ranging from $65 an hour for a paralegal to $325 an hour for Curran's time, were based on guidelines set by the federal courts, she said.
Shepard said she had no serious complaints about the Angelos firm's use of temporary lawyers. But she said the Special Counsel attorneys were so inexperienced that they sometimes had to be closely supervised by the attorney general's office.
Gately said the temps were "fine young lawyers," noting that Angelos later hired three of them. He said the additional staff was crucial to keep up with the mountains of documents uncovered.
But he said what Angelos paid Special Counsel - $21 an hour, or $31.50 for overtime - has nothing to do with the fee. He contended it is incorrect to assert that a 25 percent fee is worth a billion dollars. The fee, like the state's settlement, would be paid out over 25 years and could be cut off by tobacco industry bankruptcies, he said.
Gately said several jurisdictions that have chosen to sell their rights to future tobacco settlement payments received as little as 19 percent of the face value. If such transactions represent the true value of the settlement, then Maryland's settlement might be worth as little as $1.6 billion - and Angelos' 25 percent only $400 million, the lawyer said.
Shepard disputed Gately's logic, noting that very few jurisdictions have chosen to sell the rights to their payments. She said that $4 billion is the present value of the state's settlement; the actual dollars received will be increased by at least 3 percent each year to account for inflation.
But she added: "If he thinks his claim is worth $400 million tops, we have to talk."
If Angelos were to settle for $400 million, that would amount to $11,765 per hour, or about 1,000 times the pay received by Robbins and the other temporary lawyers.
Robbins, now an associate at another Baltimore law firm, declined to comment on the Angelos fee.
"I do have an opinion, but I'm not going to give it to you," he said. "I have to think about whose toes I may be stepping on."