Cadwalader, Wickersham & Taft steeply discounted its billing rates for work on behalf of the U.S. Treasury Department related to the Troubled Assets Relief Program.
Documents obtained from the department under a Freedom of Information Act request show that partners at the New York-based firm normally charge between $625 and $1,050 per hour. But for 500 hours of work advising the department on “highly complex bankruptcy issues in order to appropriately structure possible Treasury loans or to other investments in multiple large institutions,” the price was $525 an hour.
Cadwalader associates who typically charge $310 to $575 an hour cost the government $287.50 per hour for 150 hours of work under the TARP contract. Special counsel cut their rates to $440, down from $590 to $880 per hour, and performed 275 hours of work. Legal assistants were $125 per hour. The total contract, which was issued on Dec. 15, 2008, was worth $417,562.50.
The $700 billion TARP program was launched in the waning months of the Bush administration. In February, the new treasury secretary, Timothy Geithner, announced revisions, including plans to increase consumer lending and remove toxic assets from banks’ balance sheets.
According the government, Cadwalader “expressly consented” to having its rates revealed. The other firms named in the FOIA request — Locke Lord Bissell & Liddell, Simpson Thacher & Bartlett, Venable and (now defunct) Thacher Proffitt & Wood — claimed their billing rate information fell under the FOIA exemption for confidential commercial or financial information.
John Rapisardi, who is co-chairman of Cadwalader’s financial restructuring group, declined to comment about the firm’s billing rates or the decision to offer Treasury a discount. He also said he did not believe the firm intended to consent to the release of its rates.
The bargain-basement pricing came after Cadwalader saw a major slowdown in its structured finance practice. The firm laid off 130 lawyers in 2008, many in the practice group. In addition to Rapisardi, Deryck Palmer, George Davis and Andrew Troop in New York and Mark Ellenberg in Washington worked on the matter.
It’s not the only Treasury work that Cadwalader has landed. About a month after the TARP contract was issued, the firm in January 2009 was retained by Treasury to assist with the restructurings of Chrysler LLC, General Motors Corp. and Delphi Corp., an $8.59 million contract. Most recently, Cadwalader was selected to represent the government in the restructuring of CIT Group Inc.
Billing rates for another Treasury-hired firm, Sonnenschein Nath & Rosenthal (which acquired Thacher Proffitt’s structured finance practice in December), were inadvertently revealed earlier this year, reported National Law Journal sibling publication The American Lawyer. Sonnenschein partners charged $645 an hour and associates billed $355 for advice related to the auto industry bailout. The firm’s contract is worth $8.59 million — the same as Cadwalader’s. The government mistakenly failed to redact the billing rates when it made Sonnenschein’s contract public.
Jenna Greene can be contacted at jgreene@-alm.com.