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Arbitration is meant to be simpler and less wasteful than litigation, and the Andersen breakup was in arbitration for only two and a half years. So that’s what makes the total price tag of about $35 million in legal and arbitration costs all the more breathtaking. Considering the billions at stake, and the complex jurisdictional, procedural, and contractual issues being hashed out, maybe the number isn’t all that surprising. At least that’s what the lawyers say. In fact, it may be the one thing they can agree on. “Given the complexity of the issues involved, the size of the fees were considered by everyone involved to be reasonable,” says James Quinn, a partner at Weil, Gotshal & Manges, which represented Arthur Andersen. “If anything, the law firms were conservative in advancing their costs,” agrees Simpson Thacher & Bartlett partner Robert Smit, part of the team representing Andersen Consulting. “If this were in litigation, you would multiply [our] fee by five times. You couldn’t possibly have resolved this in any national court in less than a decade.” Because it was a losers-pay system in the Andersen arbitration — and because there was enough blame to go around among the three parties — arbitrator Guillermo Gamba’s decision lays out what share of the costs each side will pay.

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