muckraker report

EM’s former firm bills Detroit $1.4M for 6 weeks of work

Kevyn OrrJones Day, the law firm hired to oversee Detroit’s restructuring, billed taxpayers about $1.4 million for just six weeks of work, according billing statements obtained by the AM Law Daily.

The bankruptcy firm also happens to be the former employer of Detroit’s emergency manager, Kevyn Orr.

One lawyer, David Heiman, billed the city $149,419 for 153 hours of legal work from March 15 through the end of June. Other attorneys also received about $1,000 an hour.

The records show that the firm focused on 13 areas, including general restructuring advice, labor and pension analysis, debt restructuring, Chapter 9 contingency planning and water and sewer analysis.

Since Orr took office in March, some of his spending decisions have come under question. For example, the bankruptcy attorney hired a new police chief with a $225,000 salary. He also hired then-Council President Pro Tem Gary Brown for $225,000 a year.

The mayor’s salary, by contrast, is $158,000.

Orr defended the costs, saying the best lawyers and experts are needed because billions of tax dollars are at stake.

Steve Neavling

Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.

  • madelefant

    A carpet bagger.

  • Jerry Mangona

    In fairness, the pension fund set aside $5MM to gear up for legal fight. $100MM in legal bills to restructure $20BB in debt seems like a reasonable amount, but I’m not a legal eagle, so I’ll leave that to the more informed.

    Of course, the best way to avoid paying legal bills would be not having to hire an attorney to begin with.

    • M

      This is the prevailing market rate for top-notch legal services. And for as distasteful as it is to pay out so much money to a bunch of lawyers, it’s always cheaper to do it right the first time than having to go back and re-litigate any of this.

      • JuliaWardHowe

        Presupposing they did, indeed, “do it right.” It still stinks that it’s his former law firm. (Smells like cronyism and looks like another public-private revolving door, resulting in shunting public monies to the private sector at a very high rate.)

  • FreshHellNews

    That’s not even close to what Kwame could stuff in his pocket per hour.

    • Mark

      Hmmm! Well how much did Kwame put in his pocket? I’ve heard a lot of bogus numbers thrown around and none of them were close to 1.4 million! They never proved he put anything in his pocket.

      • Dave Armstrong

        Agreed, Mark.
        @Fresh: this is a serious issue, in troubled times. Will you please keep your eye on the ball, and resist the tired old temptation to reduce all Detroit’s problems to Kwame-bashing?

        • Voodoochik

          While it’s not necessarily productive to “Kwame bash” at this late stage in that it won’t produce a much-needed cash flow, I would suggest to you, Dave Armstrong, that failing to remember history dooms folks to repeat it. And Mark, no, they did not prove that Kwame actually put anything in his pocket, but I assure you that his conviction for racketeering, fraud and other related charges does mean a jury felt he put that cash somewhere on his person.

          • Dave Armstrong

            But we should look at the totality of history, which shows that Detroit has a long tradition of honest, dedicated mayors. Kwame was an aberration, and I’m getting tired of all the suburbanites reducing the cities history strictly to Kwame. That was my point.

          • Toka313

            I’d rather have Kwame than Orr.

          • Dave Armstrong

            That’s a hard comment for me to digest, Toca313. We are talking about two young Black men, both highly intelligent, well-educated, and motivated. One of them fulfills his potential, rises to the top of his profession, and is admired by everyone who comes into contact with him. The other let’s it all go to his head, succumbs to temptation, and ends up in jail.

  • Dave Armstrong

    The average law firm today bills a couple hundred dollars an hour. Admittedly, Jones Day is a cut above the average law firm – – – but a thousand dollars an hour? That seems a trifle outrageous!

    • bebow

      I agree. For that kind of loot, these players better produce some miracles.

    • Detroit

      I am an associate at a law firm, not even close to partner. I’ve been billed out at up to $350.

      • Voodoochik

        Which, even if you double the amount for partner hours, is still only $700 per hour which is outlandish.