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BUSTAMANTE BLUDGEONS LAWYERS OVER CAMPAIGN CASH When he was sued last week by the Fair Political Practices Commission, Lt. Gov. Cruz Bustamante promptly blamed his lawyers and the FPPC itself for giving him bad advice about fund raising during the recall campaign. It was an interesting tactic, considering he’ll be talking to his lawyers a lot now that he’s defending a lawsuit that could end up costing him $9 million in FPPC fines. But Bustamante didn’t blame his new lawyer, James Harrison of San Leandro’s Remcho, Johansen & Purcell, who was brought in to defend the FPPC action. Although he didn’t refer to the firm by name, Bustamante actually was pointing the finger at Sacramento’s Olson, Hagel & Fishburn, which represents his campaign committees. According to the suit FPPC lawyers filed in Sacramento County Superior Court, Bustamante moved money around different campaign committees in order to avoid the caps on large donations imposed by Proposition 34. Bustamante raised millions into his lieutenant governor’s committee, which was set up before Prop 34, and then transferred it to his recall committee. The FPPC says that’s a no-no. Bustamante claimed he consulted with the FPPC before the move, but FPPC spokeswoman Sigrid Bathen said that isn’t true. Neither Harrison nor Olson, Hagel founder Lance Olson would comment. But chances are Bustamante’s remarks won’t ruin the Sacramento firm. Olson, Hagel has been around for 27 years and represents some of the biggest Democratic fish in California, including the state Democratic Party. And at least Harrison knows what to expect if Bustamante doesn’t like the way the FPPC suit turns out. — Jeff Chorney BILLING BUZZ Billing rates are like a souffle, they tend to rise over time. But for some lawyers doing work for bankrupt Pacific Gas & Electric Co., hourly rates appear to have recently experienced a big upsurge. In December court filings detailing annual billing rate adjustments, Howard, Rice, Nemerovski, Canady, Falk & Rabkin and Heller Ehrman White & McAuliffe reported that a few attorneys ratcheted their rates up by more than $150 an hour. Timothy McCann, a partner at Howard, Rice who billed at $250 an hour in November 2002, was worth $440 an hour by December 2003 — a 76 percent increase. Joseph Hershenson, another Howard, Rice partner listed with a $250 an hour rate in November 2002, moved up to $410 an hour. By contrast, most Howard, Rice attorneys listed in the document saw rate increases of between $10 and $30 an hour during the same period. Heller Ehrman partner Lynn Loacker also experienced a steep appreciation. While Loacker commanded $351 an hour in 2002, her rate jumped to $504 in 2003. Why the big rate increases? According to Howard, Rice Managing Partner Stuart Lipton, McCann (who has since moved to Kirkpatrick & Lockhart) and Hershenson’s standard billing rates did not actually increase by the amounts reflected in the filings. “The $250 rate was a special rate for a special project,” says Lipton, “and was not indicative of normal rates.” Heller’s Loacker could not be reached for comment. — Alexei Oreskovic ANOTHER YEAR, ANOTHER FIRM Lawyers overseeing the liquidation of Brobeck, Phleger & Harrison have officially hung out their own shingle at One Ferry Building. Stephen Snyder and James Miller left Morgan, Lewis & Bockius in December to start their own general commercial litigation firm. Last week fellow Brobeck alum Luther Orton joined them from Gray Cary Ware & Freidenrich to form Snyder Miller & Orton. The trio worked together at Brobeck for more than 30 years. When the firm dissolved last February, Snyder and Miller joined Morgan, Lewis as of counsel and Orton jumped to Gray Cary. Snyder said he and Miller were concerned about spending so much time dealing with Brobeck’s liquidation. “We didn’t think we were, for lack of a better word, pulling our weight at Morgan, Lewis because we had so many responsibilities in connection with Brobeck,” Snyder said. Plus, “certain people were raising objections about Morgan, Lewis’ role in [Brobeck's liquidation] and here I was over there dealing with this. I felt we would be better off on our own.” The liquidation committee has been embroiled in litigation since Brobeck’s demise. Former employees sued Brobeck and Morgan, Lewis for unpaid severance. And the liquidation committee helped retired Brobeck partners and former senior staffers file suit against Clifford Chance and former Brobeck Chairman Tower Snow Jr. Right now, their sole client is Oakland-based Western MacArthur Co. Brobeck handled MacArthur’s suit against several insurance companies over their failure to provide coverage for asbestos claims. MacArthur has recovered $2.2 billion from the insurance companies in the past 12 months. But since the company is in bankruptcy it’s uncertain whether Brobeck will collect its contingency fees, which Snyder said total $15 million to $20 million. — Brenda Sandburg

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