January 7, 2004
Church deal a boon for lawyers
Record legal fees irk some victims
By Ralph Ranalli, Globe Staff, 9/11/2003
The $85 million settlement in the Boston clergy sex abuse scandal will set a record not only as the most expensive abuse settlement in the history of the Catholic Church, but also as the largest payday for lawyers who sued on behalf of abuse victims: an estimated $30 million in legal fees, lawyers said.
That figure has angered some victims and advocates, who say those abused by clergy will get far less money as a result, but others say the customary 33 percent cut, plus expenses, is fair, stressing that they could not have sued the Archdiocese of Boston had they been forced to pay legal fees up front.
The tentative agreement was unanimously ratified yesterday afternoon during a meeting at a downtown Boston hotel with the 57 attorneys representing 552 alleged victims of abuse, who must persuade 80 percent of their clients to sign on for it to become effective.
"They are raking in millions of dollars and just using victims, propping them up in front of press conferences so other clients will come in and hire them," said John Sacco, a victim of defrocked priest John Geoghan, who was killed in prison. Sacco had settled an earlier case with the archdiocese.
"The money victims will get is really a slap in the face when you look at what it really is after the attorneys' fees," said Sacco, New England coordinator for The Linkup, a national group that brings together those who were sexually abused. "And the lawyers aren't giving anything back." A member of the group Coalition of Catholics and Survivors, however, said that the lawyers were crucial in exposing the extent of the clergy abuse scandal and forcing the Archdiocese of Boston to deal with it.
"No one else was helping the victims," said Susan Gallagher. "[The lawyers] are highly compensated, but in this case they did a lot of good."
The lawyers, meanwhile, defend their fees, saying they have put in thousands of hours over four years fighting for clients in cases once considered legal longshots. They also point out that the amounts pale in comparison with the $775 million in legal fees paid to lawyers who represented Massachusetts in its landmark lawsuit against the tobacco industry -- attorneys who are seeking an additional $1.2 billion in legal fees.
Carmen L. Durso, who has represented sexual abuse victims for years and has 42 clients in the tentative agreement, said those who resent what lawyers make in contingency-fee cases do not appreciate the amount of work that is done with no guarantee of a payoff.
"People don't like that lawyers get the fees they get, though they're perfectly willing to accept it if it's in an automobile case or something like that," Durso said. "Look, it's two years of work, and we're not done by any shape or form."
The legal fees in the Boston abuse case are expected to be a record because of the size of the unprecedented settlement itself. In the recent $25.7 million settlement in the Diocese of Louisville, for example, legal fees were estimated at about $10 million.
Under the terms of the agreement, if all of the victims participate, the archdiocese would make $85 million available to pay their claims, with individual awards -- the vast majority of which would be between $80,000 and $300,000 -- to be decided by a team of arbitrators over the next few months.
Of the $85 million, however, lawyers will get to take $750,000 off the top for expenses they have incurred in pursuing the cases thus far. With lawyers' out-of-pocket expenses already estimated in the millions, however, many will deduct additional money from their individual clients' awards to cover expenses. They will also deduct the standard 33 percent contingency fee, or whatever fee was agreed upon, from individual awards.
In contingency fee cases, lawyers take no money up front, but take a percentage of whatever award or settlement results from a case. If there is no settlement or if the case is lost, the lawyer gets nothing.
Lawyers said yesterday that they typically deduct an additional 2 percent or so in a contingency-fee case for expenses, meaning that if a victim stands to get a $100,000 award, he or she would keep $65,000 with $35,000 going to the attorney.
Roderick MacLeish Jr., a lawyer for the Boston firm Greenberg Traurig, which represented 260 victims in the clergy abuse case, said his firm has at least $10 million in lawyers' time invested in the case, with as many as 12 lawyers working on the case at various times. The firm has also laid out more than $1.2 million in expenses, most of which will not be passed on to clients, he said.
"If people want to criticize us, they are entitled to their opinion," MacLeish said. "We have not had one request, not one, from a client who has said `I want you to reduce my legal fee.' "
MacLeish said he did not know how much the firm stood to make in fees, but other lawyers in the case estimated that Greenberg Traurig could bring in as much as $14 million. The attorney who represents the next largest number of clients, Mitchell Garabedian, stands to make as much as $6 million in fees if all his clients opt to participate, lawyers said.
"It is certainly going to be a substantial sum," Garabedian said. "But it is certainly not a windfall for me. I have spent countless numbers of hours on these cases, with clients contacting me throughout the day and night. There are many easier ways to make money than by handling these kinds of cases."
Meanwhile yesterday, Archbishop Sean P. O'Malley said the archdiocese will borrow money, consider selling more real estate holdings, and try to collect from its insurance companies to fund the settlement. He called the settlement "the answer to many prayers."
"Obviously, we are very satisfied, very pleased that the settlement has been reached," O'Malley said at a meeting of the US Conference of Bishops in Washington, D.C., yesterday. "We're hopeful this will advance the cause of healing."