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Advancing case law for in-house attorneys who take an active role at trial — and want to get paid for it — a Connecticut Superior Court judge May 21 awarded attorneys’ fees to Advest Inc.’s assistant general counsel in the Hartford-based company’s contract dispute with Carvel Corp. in Farmington, Conn. Judge Robert E. Beach Jr.’s decision in Advest Inc. v. Carvel Corp. follows a scattering of rulings in other jurisdictions in which courts have granted fee requests to in-house attorneys for helping represent their employers during trial. “You’re probably looking at less than 20 cases across the country that have addressed this issue,” said Meredith B. Stone, general counsel at Konica Business Technologies Inc. in Windsor and president of the American Corporate Counsel Association’s Connecticut chapter. Stone predicted that Beach’s ruling will prompt other Connecticut in-house lawyers to seek reimbursement when serving as second-seat to their company’s outside legal counsel. But both Advest Vice President and Assistant General Counsel Philip S. Wellman and Day, Berry & Howard litigator Steven M. Greenspan, Advest’s outside counsel during the recent trial, downplayed the decision’s impact. “There are probably not many [companies] that have [in-house] counsel who actually try cases. But this is a firm where we do,” said Wellman. “REASONABLY ACTIVE ROLE” In April, a jury awarded Advest $406,000 in damages against Carvel, holding the ice-cream chain responsible for the full amount of the investment banking fees Advest claimed it was owed for finding lenders to back Carvel’s expansion plans. Carvel initially hired Advest’s investment banking division, Ironwood Capital, to help it raise money, but later backed out of the arrangement and went back to another lender, according to Greenspan. Finding Carvel breached its duty of good faith and fair dealing to Advest, the jury also ordered Carvel to pay Advest’s legal fees, but left it up to Beach to decide the appropriate amount. Advest sought $117,612, including $19,750 for Wellman, who left Hartford-based Day Berry, as an eighth-year associate, to join Advest’s legal department in May 2000. Wellman did not work on the case while at Day Berry, but did represent clients in similar contract disputes, he said. Carvel, however, objected to Wellman’s share of the request, arguing that the payment of attorneys’ fees to in-house counsel was inappropriate, and that some of Wellman’s services were “duplicative” of those provided by Day Berry. It also asserted that Wellman’s time was spent essentially monitoring the trial. But Beach found that Wellman took a “reasonably active role” in the trial, which included examining a witness and preparing to examine other witnesses had they been called to testify by Carvel. “I believe that our appellate courts would … hold that the recovery of attorneys’ fees is not barred by the fact that counsel is in-house,” the judge wrote, “but would examine … whether attorneys’ fees were sought for activities regarding representing the party in the context of judicial proceedings or rather for activities acting as liaison and as the traditional in-house advisor.” Despite finding Wellman was entitled to a certain amount of fees, Beach took issue with his $250 hourly rate when he was serving as second seat to Greenspan, who billed at rates from $245 to $275 per hour over the course of the case. Beach settled on what he considered a more reasonable hourly rate for Wellman of $185, thus reducing the total fee request by slightly more than $5,000. ‘SOMEWHAT UNIQUE’ CIRCUMSTANCES “There’s … been a perception [among opposing counsel] that your being paid a salary” makes in-house counsel ineligible to collect attorneys’ fees, Stone said. In 1999, the American Corporate Counsel Association’s board of directors adopted a policy statement calling for in-house counsel to be paid prevailing market rates for their work in cases “where attorneys’ fees would otherwise be awarded.” Stone said Beach’s decision is a victory for corporate counsel on par with a similar ruling last year by the California Supreme Court in PLCM Group Inc. v. Drexler. Should Wellman have been “merely physically at the [plaintiff's] table and not functioning as an attorney, he shouldn’t be paid for a nickel of his time,” Greenspan acknowledged. But “why should the law discriminate against in-house lawyers” who handle tasks that otherwise would be done by outside counsel? he asked. Despite Beach’s ruling, Greenspan said he doesn’t expect such fee requests to become commonplace. The decision in Advest took into account a number of “somewhat unique” circumstances, including Wellman’s level of experience and his fairly uncustomary role at trial, he noted. Carvel’s attorney, Robert A. White, of Hartford’s Murtha Cullina, declined to comment on Beach’s ruling.

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