Back in April, before Detroit's bankruptcy was a foregone conclusion, Jones Day overcame fierce opposition from local politicians and residents to assume the role of restructuring counsel for the city under a $3.35 million, six-month contract that retroactively covered work from March 15 until September 15, Sara Randazzo reports in The Am Law Daily.
It took the firm half that time to burn through the money it was allocated, public filings show, even after writing off a considerable number of attorney hours.
"Jones Day submitted bills to the city totaling $3.7 million for its work between mid-March and the end of June, according to copies of the most recent available bills obtained through a public records request. Weeks later, on July 19, Detroit became the largest municipality ever to seek bankruptcy protection, with some $18 billion in longterm debt.
"As of mid-August, the firm had actually been paid $1 million of the amount it has billed since March, according to Bill Nowling, spokesman for Detroit's emergency financial manager Kevyn Orr, himself a former Jones Day partner. (Orr's ties to the firm fueled much of the opposition to Jones Day's hire, with critics citing what they saw as an ethical conflict in his working with his former firm. Legal ethics experts told The Am Law Daily that the criticism was misplaced, and the contract eventually won approval from both the city council and Orr.)
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