The Work

October 17, 2008 10:45 AM

Simpson Getting $300,000 from the Treasury

Posted by Zach Lowe

The Treasury Department has released its contract with Simpson Thacher & Bartlett. It turns out the firm will make $300,000 over the next six months for its work as the Treasury's lead adviser in the bailout. (A link to download the full contract is below).

As The Am Law Daily has previously reported, the Treasury reached out to six law firms, requesting proposals for the work. Four declined: Davis, Polk & Wardwell, Wachtell, Lipton, Rosen & Katz, Cleary Gottlieb Steen & Hamilton, and a mystery firm. Lawyers at those firms have said they turned down the work because they were not sure they could represent the Treasury and their major banking clients at the same time. Simpson chair Richard Beattie told The Am Law Daily his firm will continue to represent its banking clients, including JPMorgan Chase, and that the Treasury did not pressure them to drop any clients.

Simpson and an unidentified firm submitted proposals; the Treasury chose Simpson for the job.

(The Treasury has not responded to several requests from The Am Law Daily for copies of the letters the department sent to the six firms, as well as the letter sent to the firm it ultimately rejected.)

In its pitch, Simpson told the Treasury they could do the work in 3,760 hours--about 40 percent fewer hours than the 6,267 the Treasury anticipated in its solicitation letters, according to the contract.

The hours break down like this: 564 for partners, 1,692 for associates, 376 for of counsel and 1,128 for legal assistants. The Treasury helpfully blacked out the hourly rate each group will earn. But the overall rate breaks down to $79 per hour--a pretty decent deal. (Of course, the hourly rate for attorneys will be much higher once the legal assistants are taken out of the equation). The contract leaves the door open for more work should Simpson reach the 3,760 hour threshold.

Under the deal, Simpson will help with the "formulation of equity participation documentation including, but not limited to, co-investment accompanying private sector investment, shelf facilities for government investment without private sector investment, warrants or senior notes accompanying mortgage-backed securities or whole loan purchases, and other direct investments."

The contract lists the following Simpson partners as the go-to personnel: Lee Meyerson, David Eisenberg, William Dougherty, Sean Rodgers, Brian Steinhardt, and Gary Rice.

Meyerson and Simpson spokesperson Susan Bussy did not immediately respond to requests for comment on the contract.

Download the contract.

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Are you sure you're reading this right? It looks to me as though the $300,000 is a retainer and its a "time and materials" contract. I imagine that the billable hours will cost more than $79. But then again, I would not put it past the good folks at Simpson to be a little patriotic and give the guv a deal.

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