Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.law From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: law Wed, Jun 24 1992 Date: Wed, 24 Jun 92 05:16:10 EDT Message-ID: 06-24 0000 DECISIONLINE: Business Law USA TODAY Update June 24, 1992 Source: USA TODAY:Gannett National Information Network LEGAL FEES SCRUTINIZED: The rising cost of litigation, fee-padding and the recession have combined to push companies to get legal expenses under control. Analysts say the days of companies thinking little about handing over a check to outside lawyers are over due to rising costs. Annual costs for legal services have risen to between $25 million and $100 million for Fortune 100 companies. (For more, see special Fees package below.) STRIKE HAS DOMINO EFFECT: Freight railroads began a coast-to-coast shutdown early Wednesday after the machinist union struck CSX, and Amtrak said its passenger service outside the Boston-Washington corridor would also be halted. Pickets were placed at key points in the CSX system in the East and Midwest. Amtrak had to halt operations because most of the track over which it operates is owned by the freight lines. ITC EXPECTED TO VOTE WEDNESDAY: The International Trade Commission is expected to vote Wednesday on whether sales of minivians by Mazda and Toyota are hurting U.S. automakers. The Commerce Department ruled May 19 that Japanese minivans are sold in the USA below fair price. If the ITC says that hurts U.S. automakers, duties could boost prices on Japanese minivans. RULES WOULD FORCE BANK CLOSINGS: Rules proposed Tuesday by the Federal Deposit Insurance Corp. would severely restrict or close banks that are operating with little capital. The FDIC is seeking public comment on the rules which would, among other things force banks with less than 2% capital to be closed if they fail to strengthen their finances in 90 days. GROUP CALLS FOR PROBE OF FORD: The Center for Auto Safety Tuesday filed a petition asking the Federal Trade Commission to investigate claims that Ford Motor Co. is hiding faulty paint jobs on F-series pickup tricks. The consumer group wants Ford to notify 4 million owners of 1985-92 F-series trucks with the alleged problem. A Ford spokeswoman said the problems are rare and do not justify notification of owners. SEC RELEASES RULES: The Securities and Exchange Commission Tuesday released for public comment rules making it easier for shareholders to communicate with one another. The rules aim to increase corporate democracy and take some of the mystery out of corporate pay. Among rule changes, shareholders would not have to fear a lawsuit if they communicate with more than 10 other shareholders. UPI AWARDED TO SAUDI FIRM: U.S. Bankruptcy Court Judge Francis Conrad Tuesday awarded United Press International to Saudi-owned broadcasting company Middle East Broadcasting Centre. The London-based firm bid $3.95 million. Conrad rejected New York lawyer Leon Charney's $3.75 million offer and televangelist Pat Robertson's $900,000 bid for UPI's archives, copyrights and name. FEW DETAILS GIVEN: A lawyer for the Middle East Broadcasting Centre gave few details Tuesday about the firm's intentions for United Press International, which a bankruptcy court judge awarded to it Tuesday. MEBC will provide $200,000 Wednesday to keep the wire service going and will invest $10 million to $12 million over the next two years. NO OPPOSITION TO FEES: No opposition was voiced Tuesday at a Los Angeles City Council committee meeting on a plan to charge an extra $3 per airline ticket at the Ontario and Los Angeles international airports. The fees are scheduled to take effect Feb. 1 and are estimated to raise $345 million in the next five years to fund improvements at both terminals. The fees were authorized by federal legislation in 1991. SPECIAL PACKAGE ON FEES: FIRMS TRY TO REDUCE FEES: Companies are trying to reduce their growing legal expenses. Among actions being taken are caps on legal fees, the use of outside auditors to examine fees that seem out of line and closer inspection of bills. Fred Veil, an in-house lawyer for Elf Atochem North America, says that any firm that is not trying to reduce its legal expenses is, "not doing the job they should be doing." OUTSIDE AUDITORS POPULAR: A growing trend in reducing legal costs is the use of outside auditors to study billings. John Allen, vice president and general attorney at Liberty Mutual says legal auditors are, "in vogue this year." Among tactics at Liberty Mutual, Allen is working with an auditor to develop a computer program that will let his company track legal work and flag unusually high fees. STRANGE BILLINGS FOUND: Former corporate lawyer John Marquess has found some strange billings since he started the firm Legalgard, which audits law firms. Among his finds: A Boston law firm billed a company $140,000 for heating and air conditioning its offices within a $2.9 million charge for a two-year trial; A Los Angeles lawyer turned in bills saying he worked 50-hour days on three occasions. LEGAL FIRMS TRYING TO HELP: Outside firms say they are trying to help in the effort to reduce costs. The firms, which can get as much as 50% of their billings from corporate clients, say they are trying to become more accountable and explain their billing methods. "The clients dictate the industry, not the lawyers," says Deborah McMurray of Johnson & Gibbs. "We are responding to what our clients need." (End of package.) Business Law Editor: Jason P. Smith. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM