Widow’s Estate Ordered To Pay Lawyers $44 Million For Five Months Work

New York’s highest court ruled this past Tuesday that the Estate of Alice Lawrence must pay Manhattan law firm Graubard Miller $44 million in contingency fees as a result of a $111 million settlement reached five months after the dispute began.  According to an October 28, 2014 Reuters article titled, New York law firm wins case over $44 million in fees charged to developer’s widow, the Court also rejected the Estate’s claim to recover the more than $5 million in gifts Ms. Lawrence gave to three of the firm’s lawyers, ruling that the claim was too late.

125px-Seal_of_the_New_York_Court_of_Appeals.svgMs. Lawrence, widow of developer Sylvan Lawrence, retained the firm in 1983 to represent her and paid them $18 million in hourly fees over 22 years.  When she died in 2008, her children said Ms. Lawrence was remorseful she signed the contingency fee agreement, comparing her attorney to “Svengalis.”  The Court, reversing a lower court ruling that the fees were “unconscionable,” found that the 80-something widow was a sophisticated client:

She was a competent and shrewd woman who made a business judgment that was reasonable at the time, but which turned out in retrospect to be disadvantageous.

Without more facts, it is hard to know which court ruling was correct.  Perhaps Ms. Lawrence was a savvy legal consumer and made a bad bet.  Or could the lawyers have taken advantage of an elderly woman and given her bad advice to induce her into the contingency contract?  Regardless, this is a cautionary tale to all legal consumers, who should always ask themselves whether the agreements their lawyers propose are in their best interests or in the best interest of their lawyers.

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