On the cost of good legal help at WP Carey…

May 4, 2010

Here at footnoted, we love lawyers. Really we do! They’re not only the source of much of what we write about day in and day out, but several have been known to provide us with tips on funny stuff that they find buried in the filings. Others have provided us with guidance — free of charge — as we struggle to understand certain things buried in the filings. Indeed, we realized how lucky we were to be on the receiving end of all of this legal talent when we caught something interesting in the proxy that WP Carey (WPC) filed the other day. Here’s the part that caught our attention:

Edward V. LaPuma resigned from the Company pursuant to a mutually agreed separation. As part of this separation, the Company effected the purchase of Mr. LaPuma’s substantial minority interest in WPCI, for cash, at a negotiated fair market value of $15,380,000. The Company also agreed to pay the $250,000 in legal fees incurred by Mr. LaPuma in connection with the negotiation of his separation and this associated interest purchase.

We’ll forget about the $15.8 million, which the company had previously disclosed in both this 8-K on Dec. 31 (when we’re guessing few people were paying attention) and the 10-K that the company filed at the end of February. After all, as the 8-K noted, La Puma had been at Carey for 15 years in a key role. But the $250K in legal costs is hard to ignore, especially when you actually read the 10-page agreement, most of which reads like pretty typical boilerplate.

We’d obviously be making a guess here, but it’s hard to imagine a lawyer, let alone a talented lawyer at the top of his game, spending even 25 hours on this sort of agreement, which, if that were the case, would work out to $10,000 an hour. That’s an enviable billable rate if ever we saw one — even in a place like New York, which is where LaPuma’s lawyer, Daniel A. Pollack, works at the firm of McCarter & English. Judging from the bio on the firm’s site, Pollack is clearly a veteran attorney, having once taken on Eliot Spitzer. Even so, $250,000 to negotiate a 10-page contract seems a tad bit extreme.

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