September 26, 2011 7:27 PM

So How Much Are the Lawyers Making Off the NBA Lockout?

Posted by Brian Baxter

The lockout threatening to scuttle the 2011–12 season for the National Basketball Association entered a perilous new phase last week, as the league postponed training camps and canceled 43 preseason games when talks between owners and the players union over a new collective bargaining agreement hit a snag.

With negotiations tentatively set to resume Tuesday, The Am Law Daily was left pondering one of its favorite topics: How much are the two sides spending on lawyers as they attempt to strike a new labor pact?

With neither party in the habit of discussing such matters, a definitive answer is almost impossible to determine. But a review of documents filed with the U.S. Department of Labor by the National Basketball Players Association (NBPA) between 2005 and 2010 offers some insight into how much the union, at least, spent on legal fees for the last round of labor negotiations—and a taste of how much it could end up spending on lawyers in connection with the current talks.

All told, the NBPA spent some $2 million on outside legal advisers during the years in question, a period of relative labor peace that followed the implementation in July 2005 of the league's most recent collective bargaining agreement.

According to the annual financial reports filed by the NBPA with the Labor Department in the five years after that—the most recent of which was submitted in June 2010—the union has made payments to at least nine law firms. (Federal law requires that all labor unions in the U.S. make annual LM-2 filings with the Labor Department; the NBPA's next filing will reveal some of the monies spent on outside counsel during the current lockout.)

Dewey & LeBoeuf, whose global litigation chair Jeffrey Kessler serves as lead outside counsel to the NBPA in its ongoing labor negotiations, has earned nearly $1.1 million in fees in connection with its union work from July 2005 through June 2010.

Dewey's ties to pro basketball start with Kessler, who joined predecessor firm Dewey Ballantine in 2003 from Weil, Gotshal & Manges, where he was part of a litigation group that represented unions for players in the NBA and National Football League. (Kessler helped NFL players reach their own labor deal over the summer.)

The lion's share of the Dewey billables for the NBPA on file with the Labor Department were recorded on September 23, 2005—about two months after the last labor agreement was finalized—when the union made a $572,438 payment to Dewey Ballantine. The NBPA also made multiple payments that year and in early 2006 to LeBoeuf, Lamb, Greene & MacRae totaling $155,582. (Dewey Ballantine and LeBoeuf Lamb agreed to merge in August 2007.)

NBPA records also show that Kevin Murphy, an economist advising the union on its current labor negotiations with the league, was paid $95,163 in the weeks after the last NBA collective bargaining agreement closed in July 2005.

Several other law firms also did work for the NBPA during that period. Howrey, which officially disbanded earlier this year, received nearly $303,000 in a series of payments between 2007 and 2010. Line items for payments to Howrey stated the payments were related to "new business initiatives" and something labeled the "Beijing Project."

As previously noted by The Am Law Daily, the NBPA hired former Howrey litigation partner James Hibey earlier this month to supplement its Dewey-led legal team in litigation with the league in federal court in Manhattan. Hibey left Howrey in March after the firm's collapse and joined Steptoe & Johnson in Washington, D.C.

Syracuse-based labor and employment firm Blitman & King, which has long-standing ties to the NBPA, received payments totaling $240,881 between 2005 and 2010. Former NBPA general counsel Gary Hall, who passed away in May at 67, was once a partner at the firm. Hall was close to NBPA executive director G. William Hunter, a former Syracuse University football player and ex-federal prosecutor.

Other firms receiving payments from the NBPA between 2005 and 2010 include Washington, D.C.'s Davidoff Malito & Hutcher ($135,276), D.C. employee benefits shop the Groom Law Group ($86,878), Squire, Sanders & Dempsey ($50,260), New York's Rick, Steiner, Fell & Benowitz ($17,775), solo IP practitioner Peter Thall ($17,503), and Nixon Peabody ($5,363).

The NBPA records on file with the Labor Department also reveal licensing payments to hundreds of current and former NBA players, everyone from Khalid El-Amin and Mookie Blaylock to Bimbo Coles and Soumaila Samake. In one instance involving an individual identified as a retired player in Texas, the money is listed as going to cover child support payments. In another case, this one involving the late Bison Dele, the money is earmarked for the player's estate.

In addition to listing payments to outside advisers, the Labor Department filings detail the salaries of key NBPA employees. Hunter, for instance, earned $2.4 million in the union's most recent filing ending in June 2010, well below the nearly $3.6 million in total compensation he received the year before.

Associate general counsel Ronald Klempner, a former Weil associate who has taken over for Hall as the union's top in-house lawyer and is working closely with Kessler on the current labor negotiations, earned $250,802 in total compensation in 2010. (Klempner, Hunter, Kessler, and player president Derek Fisher are leading the union's team in labor negotiations with the league.)

Other in-house attorneys listed on the NBPA's most recent Labor Department filing are counsel Sean Brandveen ($90,583) and Yared Alula ($61,295). The documents show that yet another in-house lawyer, former deputy counsel Albert "Hal" Biagas, earned $120,817 before leaving the NBPA in December 2009 to join the Wasserman Media Group. (The Am Law Daily reported that year on Biagas's efforts in helping Stephon Marbury and the New York Knicks part ways.)

As for the attorneys representing the league at the bargaining table, former Proskauer Rose partner and current NBA commissioner David Stern is leading a team that includes several former Am Law 100 lawyers: deputy commissioner Adam Silver, general counsel Richard Buchanan, and deputy general counsel Daniel Rube.

As previously reported by The Am Law Daily, the NBA has turned to Proskauer sports law group cohead Howard Ganz and Skadden, Arps, Slate, Meagher & Flom partner Jeffrey Mishkin, the league's former chief legal officer, for outside legal counsel in the negotiations.

 

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