Google Files Bill of Costs for Oracle to Pay - $4,030,669 | Hacker News Reader

Google Files Bill of Costs for Oracle to Pay - $4,030,669

groklaw.net

102 pointslightspot67 comments

The cost bill filed by Google underscores the intensity of this case and shows that we caught only surface glimpses of what surely were day-to-day firefights keeping the lawyers and their minions going round-the-clock for an intense year's worth of fighting.

A "cost bill" is not a bill for the attorneys' fees incurred in a case. Under U.S. rules, the parties bear their own legal fees in most cases (and that is the case here).

But federal court rules do permit a prevailing party to recover from the losing party necessary costs incurred in dealing with document production and similar matters in the litigation. The out-of-pocket bill here (not including attorneys' fees) for Google to filter through 97 million documents and to produce just over 3 million of them after careful assessment and screening: about $2.9 million (mostly paid to electronic discovery service providers, who surely found full-time employment in this case during this past year).

The bulk of the remaining bill for costs consists of nearly $1 million paid to expert witnesses for their assistance in helping to prepare and present Google's case.

In a case like this, Google's attorneys' fees had to run at least $10 million per month, at least during the intense phases of the case. I would estimate, then, that total attorneys' fees in the case easily exceeded $100 million and may well have done so for Google alone.

Big Law may be in the doldrums today in general but a case like this clearly offers a big payday. The law firms here were all exemplary and undoubtedly earned it. Still, the cost is staggering to contemplate for the casual outside observer.

They did not earn it. Lawyers charge exorbitant prices because they can -- they have you by the balls, and you don't really have an option not to pay them -- not because their services are actually worth $100 million+. I've admired your posts for years here on HN, but it's not just staggering to a "casual observer"; it's staggering to anyone with a sense of decency and propriety.

The high rates that top lawyers get paid are simply market rates. We pay them too. Cheap lawyers are not a bargain.

Decency and propriety? What do you even mean by that? That you think the proper rate for legal work should be lower than the current market rate? What basis do you have for such a claim?

I had it brought to my attention recently, by a recently bar-certified attorney who has ethical qualms about it, that members of the American Bar Association and its state franchises have a monopoly on legal representation services in the US. You cannot be represented in court by someone not certified by the bar. Lawyers are the only privately licensed group that receive this level of market protection; doctors are similarly protected, but it is by a governmental entity (and one might argue that it's in even worse shape because of it).

One could very easily argue that these barriers to entry lead to pricing pressure and artificial scarcity that has no direct relationship to the "current market rate". I'm only recently becoming familiar with this topic, as it's one of those things that Just Is. But, the more I learn about it, the more hesitant I become to just write off high legal fees as a result of a free market. And, the more I wonder why it is that lawyers, of all people, receive such a strong defense against competition...it couldn't possibly be that the majority of politicians are also lawyers, many of whom will return to practice after holding office, could it?

Note that I'm not arguing against the idea that a great attorney is deserving of high rates, merely the idea that attorneys fees represent anything like an actual free market rate.

The "barriers" you describe amount to nearly nothing. The salary a lawyer commands fresh after passing the Bar is not significant enough to be relevant to this conversation.

Just like most other industries, it's experience, deep knowledge of their field and skill that commands the high prices.

It's market driven because, despite $500/hour rates, you can still find a lawyer for $50. Both of whom passed the Bar but they're massively different in terms of their knowledge and experience.

Edit: one more thing, if you're looking for professional legal help from someone who couldn't pass the "barrier" of the Bar exam, you're probably going to get poor legal advice.

But you cannot represent a company of which you are the owner and sole employee. So when a patent lawsuit appears, you can choose to try and fight it with a $50/hour lawyer... or pay the demands.

The thing is that it is not the barrier to entry of the bar that is creating the expense. It is instead the nature of the law itself. Perhaps the ethical issue here is not the fees that lawyers charge or the licensing process, but the fact that you need them at all in so many situations. The ethical issue is that there are too many laws.

During my (admittedly brief) research into this topic, I began to wonder if perhaps there isn't a self-reinforcing process at work. Lawyers make the laws (because lawyers make up more of the law-making bodies in the US than any other profession by a huge amount), determine who is qualified to both prosecute and defend, determine the restrictions on who can compete with them, and determine how complex the laws will be. The people making the laws thus have a vested interest in them being too complex for the layperson to understand.

I'm genuinely not anti-lawyer. But, I can't help but think the system we have has many unintended consequences, and contributes to a legal system in which only the very wealthy can participate in a meaningful way. This may explain why, for example, polluters always seem to end up in the neighborhoods of poor people. If they set up shop next to a billionaire, they'd be sued out of existence; poor folks simply don't have the funds to fight a big legal battle like that. I'm pretty sure the bar is not the biggest cause of any of this, but it does seem obvious to me that disallowing anyone other than members of the bar from participating directly in the legal process definitely manipulates the market.

The more vicious part is the way the bar system prevents offshoring of work. More tedious legal stuff would be some of the best to offshore, but unsurprisingly it's very difficult to do so.

>The high rates that top lawyers get paid are simply market rates. We pay them too. Cheap lawyers are not a bargain.

I wasn't arguing that Google should've used cheaper lawyers -- I believe the costs across the entire legal industry are ridiculously inflated, for multiple reasons. Like health care, there are a lot of elements in play and it's hard to pin any single thing down and say "this is the magic bullet", even though, also like the medical industry, there are a handful of major, easily identifiable "indecencies" in the legal industry. Note also that one can say the current costs of medicine simply represent "the current market rate" and that these services are worth what people are paying for them (and in medicine, that's more likely to be true than legal services, though the exorbitance there isn't justified either).

By "decency and propriety", I guess I mean "someone whose perspective is such that a fair analysis of the real value of the services provided by lawyers can be assessed", i.e., from the perspective of a basic decent person. I understand this perspective can become foggy as one accustoms to the rates commonly charged by legal professionals, or worse, becomes a legal professional themselves, without necessarily losing decency in the general sense -- it is just that this person's "decency gland" (as it pertains to the price of lawyers) has been forced into submission in order to retain and/or provide a significant amount of legal services.

Yes, I think a "proper rate" for legal work would be less than the $250/hr baseline that all of the attorneys in my area charge, just as I think a proper rate for the stitch-up of a cut should be less than the $3,300 an uninsured friend was recently charged (for him, over a month of wages. He spent less than two hours in the ER).

You haven't answered the question, though: Why does the market continue to bear what you see as exorbitant rates? Consider that we have an oversupply of bar-certified lawyers, there is no conspiracy or collusion going on. What is preventing those unemployed graduates from entering your $250/hr market, charging $150/hr, and eating the other guys' lunches?

I don't have time to get too deeply into it. I addressed this point lightly and I think "there are a handful of major, easily identifiable 'indecencies' in the legal industry".

A few among these: the general requirement to obtain a classical JD from an accredited law school (a few states have partial exceptions to this) in order to sit for the bar, which places a debt burden upon the new lawyer usually at least equivalent to a mortgage, rigidity and verbosity of the court system, including rules that specifically exclude self-representation and impose needlessly onerous paperwork requirements, paywalls imposed by legal references if not by the court system itself (variable by state), and of course, the realization among lawyers that people rarely have a realistic option not to pay you or one of your direct competitors, so even if explicit collusion does not occur, there is an implicit price floor that no one is willing to break lest they invoke a "race to the bottom" (a function of the serious prohibitive barriers to entry that prevent new blood from coming and breaking this floor).

Why can't the loads of unemployed recent JDs swoop in and take over the market? Because like most recent grads in other fields, these JDs don't have any idea what they're doing and can't supply seriously meaningful services at any rate.

>The high rates that top lawyers get paid are simply market rates

Market rates propped up by having the ability to restrict entry into the market controlled by other lawyers.

That is true but not because of the "lawyer monopoly" because of the bar requirement. Google has their own legal department and if required they could easily find a 50$/hour attorney to file everything they write in court...

In my opinion the real reason is that some areas of law like patent litigation require highly specialiced knowledge that is almost impossible to acquire outside of a few special firms. An unexperienced law school graduate trying to do patent litigation would be like a med school graduate trying to do brain surgery - it just isn't feasible without years of additional training by someone who is already an expert in the field. But while after medical school this is provided by the residency programs at hospitals, all that exists for lawyers is starting as an associate at specialized for-profit biglaw firms - who have no interest in "teaching" as many people as possible, but raher in maximizing their billing rates...

I would argue that hiring lawyers is like hiring developers in SV. There are many developers but if you want to hire A class developers, you have to pay A class rates and compete with everyone else trying to hire A class developers. Lawyers are no different. If you want to hire A class lawyers, you're going to pay A class rates.

The "A class rates" for developers rarely approach the minimum rates for legal services. The highest rate I've received from a consultancy was $200/hr, and they were working in an extremely specialized area with literally the best developers money could buy -- the only fundamental builders of that technology that weren't on board at that company were those who refuse to take a job. I know that Percona lists $300/hr as their rate, and we have the same story here; extremely specialized field, developers that are and have been deeply involved in the development of the technology for most of its lifetime. Generalized high-powered development help typically maxes out in the $100-$150/hr range, at least in my experience, and even that is difficult to get outside of California.

$250+/hr is the common baseline rate in my area for real commercial legal services (that is, more than emailing a template for a contract), not the "A class rate", and I would guess areas with higher cost of living are worse off. I have associates that pay $450-$500+/hr for their legal help. I know of lawyers that charge $750+/hr; that, you may say, is the "A class" rate for lawyership. Note the disparity between development consultancies and legal firms -- we max out near a law firm's minimum rate.

Comparison to other highly-skilled professionals, like developers, is indeed valuable, but only further demonstrates the exorbitance of legal pricing.

Programmers outright refuse to organize. Lawyers, like any other professional organization, are highly organized which impacts rates.

You can start coding for hire right out of high school, if you've done the right prep work. It takes ~7 years before you can start practicing law.

I would argue that at least 50% of programmers out there are not 'highly-skilled professionals,' being neither highly skilled nor professional.

This isn't relevant at the price points we're discussing. I've never known a 16-year-old to get paid $100/hr for his consulting services -- they are usually excited to take gigs at $15/hr, and the problem sets they encounter are usually tractable for their as-yet basic skill set. I can say as an individual who has made this progression from fresh-from-high-school freelancer to full-scale consultancy owner, you really hit a ceiling once you get around $50/hr. Unprofessional developers usually have significant difficulty crossing that threshold, at least in my local market, and there are not many absolutely incompetent developers floating around at higher rates. Most of our peers that can remain in that price range are at least respectably competent, even if we're still better than them.

Another way to think about it would be how high would A class programming rates be if programmers had to be members of an official organisation and if the education for skills at the high end was only accessible to those who were already members.

Of course, within the current justice system it will often make sense to hire an expensive lawyer. You are in a spending arms race with your opponent. The problem is this is a fault of the system.

We want a system that produces the fairest outcomes possible, and there's more than one way unfair outcomes can be produced. Under the current system, if I had a patent and Oracle infringed upon it, I would be denied justice because I don't have $100M of cash to pay to litigate.

If we had a German-style fixed fee system where any patent dispute could be resolved for a flat fee of (say) $20,000 I would not be denied justice. The rich would not have an advantage over the poor in court. On the other hand, this would deny Google and Oracle the opportunity to spend 5,000 times as much to get the dispute analyzed in (what was presumably) a great deal of detail. Is that a bigger injustice than the fact I couldn't receive justice at all?

Personally I see this Oracle/Google dispute as like Bastiat's parable of the broken window - this case represents a net loss to society of $100,000,000+ as surely as if Oracle and Google had broken one another's office windows to the value of a hundred million dollars.

You have to pay the market rate because you are competing for justice, and if you can't afford the market rate, you can't afford justice. Is this concept decent and proper?

To the casual observer it seems the same as when you pay a hair under $5/gallon at the gas pump in California. (Way too much.) I'd imagine that is his basis. I doubt anyone walks away saying "man, I totally just paid my lawyer a fair amount for his services."

If you think $5/gallon is a lot then you've obviously never visited the UK where it's currently about $8.50/gallon.

I made sure to note the location because I'm aware that in the UK you guys have a bunch of taxes shoved into the price of your gas. We don't. We're paying all those lovely taxes and the expensive gas prices. Maybe it comes out to being about the same? I don't really know that answer. But the gas companies are reporting "record profits" while we're paying $50-$80 to fill our tanks each time (in California). I'm just using this to illustrate most people's perception of what they pay lawyers -- way too much.

And the UK has how many more miles/kms of roads than the US, again?

And that's relevant because?

Because $10/gallon doesn't matter much if you're filling up your tank once a month.

The law should be expressed in code and evaluated on a computer, with all dispute confined to the values of the inputs (e.g. time of commission of a crime, geolocation of violation).

It is currently written in legalese and executed by a judge. This does not consistently produce the same result for the same inputs at different locations in spacetime. If it did produce the same results, we would not need lawyers or judges to determine what was legal; we could simply make API calls and evaluate functions.

You could only realize a vision like this in a new country, but that is what seasteading is for.

While it would be nice to think of law as pure enough to be calculable by machines and algorithms, the reality is that the law is subjective...the inputs you speak of are too many and the situations that occur result in problems that are NP-hard.

While I do not disagree with you, implicit in your post is an assumption that humans can solve these NP-hard problems. More likely, most examples are either not NP-hard, the average case is easy, easily approximated or we simply don't do well in handling legal cases at all.

I would offer Strong AI-complete as a counter suggestion.

> The high rates that top lawyers get paid are simply market rates.

It isn't a free market however. http://en.wikipedia.org/wiki/Admission_to_the_bar_in_the_Uni...

"They did not earn it. _______ charge exorbitant prices because they can -- they have you by the balls, and you don't really have an option not to pay them -- not because their services are actually worth ______."

I've heard this sort of statement from just about anyone looking from the outside into any other profession.

Developers, Photographers, Architects, Plumbers, Lawyers whoever don't actually earn their rates. Their services aren't actually worth $$$. They charge exorbitant prices because they can. Sorry - it's all hogwash.

Someone's services are worth something to you, otherwise you wouldn't be paying them. It's a business decision. You can pay to have your car fixed so you can get to work, you can pay to get your stove fixed so you can cook, you can pay to have your toilet fixed so your feces go to the sewage treatment plant instead of spewing all over your floor, you can pay to have a building designed so you can build it or live in it, you can pay for a non-stop flight so you can be there in time for the meeting with PG, and so on.

Google made $2.89B profit on $10.645B revenue in their most recently reported quarter. An additional $14M in legal expenses per quarter is no doubt far less than they normally spend on a regular basis for legal. In fact, Google has no less than 70 openings for legal positions posted on their website.

~$4.5M a month in legal fees is an extraordinary sum to the average HN commenter (including me), it is not an extraordinary sum for a company the size of google, but merely a regular cost of doing business.

Lawyers may have Joe Ordinary "by the balls" in his divorce case, but I'm quite sure that no one has Google by the oo's. When it comes to law, scale makes a quantitative difference. A case this size is 100% politics and its manipulating the precedents for an entire country. Its damn near diplomacy.

"Big Law" is suffering these days. Law firms lined up for this one by the trainload, Google picked the best of the best and paid what they thought it was worth to them.

Out of curiosity, how much would you bid to reproduce some tens of millions of pages of documents in such a way that you would be willing to testify before a judge that every single one was true and accurate?

(Considering that the judge will not take your word for it, how much should you set aside to pay someone else to go through it all and check your work?)

Are you implying that someone actually "went through it all and checked the work"?

Are you implying that Google spent three million dollars sending an intern down to Kinko's with a truck full of file boxes?

As grellas clarified, only the $4 million requested went to document production. Lawyers fees have not been disclosed but likely exceeded $100 million. That's the contentious figure. $1-$2 per document is probably not totally unreasonable, but then I don't really know what goes into these things.

Also, in my uneducated opinion, I think "millions" of documents is probably not really credible in terms of what a normal person thinks of as a document. This may include the entirety of Android's source code, which is thousands of files ("documents") by itself. I'd like to be corrected on this if there is actually a real amount of work for each of those "millions" of documents entered into the case. (If there were millions of unique and independent documents for review, I don't think anyone would believe a court could truly process these in a timeframe of 18-24 months.)

From the filing: "Google delivered to its document vendor over 97 million documents for electronic processing and review. ... Google’s document vendor filtered custodial documents for production by running agreed-upon key-term searches, and converted documents to TIFF images for production. Over the course of this litigation, Oracle served nine separate Requests for Production of Documents, with 204 individual document requests. Google electronically produced over 3.3 million documents in response to Oracle’s requests, and Google’s 60 separate document productions span over 20 million pages."

I suppose you can debate the exact figures if you like, but they did spend $2,900,349 on this, and I'm betting they got a good deal.

As I stated, I'm not discussing document processing rates in my original comment. I don't contend that this is exorbitant. I also still don't believe your snippet is a sufficient basis upon which to accept there were really millions of documents in the sense of what most people would consider "documents".

No one does believe that a court would review every document ever read by anyone associated with the case.

That is the job of the law firm who would distill the thousands/millions of documents into a single argument for the court. Some documents maybe relevant. Some may not. The point is that it takes someone with skill a great deal of time to review them.

What a hypocritical remark. Someone with decency and proprietary does not call into question an entire profession of people. The law profession attracts a lot of extremely intelligent and honorable people. Unfortunately like any profession the bad ones tend to make the most noise.

I sure as hell can't imagine many people with the intellectual rigor capable of turning the staggering volume of documents into a single, compelling argument.

I believe the loser of a court case, especially if they are the initiator, should foot the legal bills for both sides. At least this will offer small parties who are attacked by predatory lawsuit from a large party a fighting chance (with obvious risks), especially when the case is not warranted. Why is this not implemented in US law?

One reason it is not implemented is that it would stop most poor people from suing insurance companies. They have very deep pockets and the bill would be excessive, so the cost of trying to right a wrong would scare off most attorneys that would take the case. Polluters is another class of case that generally fits into this.

Tort reform is needed, but automatic loser pay works to the advantage of big companies.

Looser pays always sounds good in theory and is hell in practice. We have it in Germany (IANAL and there are exceptions and so on) and the result is that companies can do almost anything without getting sued. The risk of paying the whole case is too high for individuals.

Whatever the result, the lawyers always win.

This is pocket change for Oracle. The real set back to them is the result of the case.

And though it's good to see the aggressor in one of these lawsuits actually lose, it's saddening to think that if Oracle or a pure patent troll went after a company without 4 million to pay for a defensive suit, they would have won.

Note that this does not actually include the attorneys' fees, though.

When I was a kid, I read comics or heard jokes where the punchline was about everyones unanimous hatred for lawyers, I was always a bit confused.

But witnessing the last few yrs in the tech industry (in addition to politics and divorce law), it's become very apparent to me why thats the case.

Here's a viewpoint that's even more scary than a bunch of villainous lawyers out to take advantage of the poor sheeple: The lawyers, the accountants, the CEO's, even judges and juries are just out working hard, trying the best they can to get along in life. None of them are particularly scummy. The rottenness is just an emergent property.

Lawyers just happen to live on the fault-lines of the tectonic plates of greed and self interest.

It isn't just an emergent property. When you undermine contract law and private property rights the whole system turns to shit.

Libertarians complain loudly about things like guns and drugs, but the erosion of the backbone of an economy is a much more insidious problem.

As long as patents are part of the problem the solution is not more property rights.

I still don't see how the lawyers are the bad guys here. The company knows that the country's laws might allow it to weaken the competition. It wants to avail itself of that option. The laywers are just the executors of that action, the messengers if you will.

They're certainly happy to make a buck from the process, but unless they're the ones to actually create the laws and keep them in place despite their ridiculousness, they are not exactly to blame.

> "they are not exactly to blame."

Oh hell naw.

If someone leaves their car unlocked sitting by the curb with the keys in the ignition, is it right to steal it? The fact that someone has (stupidly or otherwise) created a situation that is easy to take advantage of in no way excuses the person that exploits it.

The fact that we have creating a patent and copyright law situation that borders on the absurd is one thing, people actively seeking to profit from this sorry state of affairs are as guilty as they come.

I think the point is that it is Oracle trying to exploit the situation. Not their lawyers.

It's an adversarial system, though. For every legal team trying to exploit the flaws in our system, there's another trying to stop them from doing so. They aren't all bad actors.

What I can't understand is why billing rates haven't plummeted due to the glut of law school grads they keep talking about. It's not as if the bar associations have kept that many off the market.

The problem is money.

Large companies can use lawyers to get things like special taxation benefits ("if we build our factory here, can we get a tax break?") or to stamp out competition from smaller companies through patent lawsuits, etc.

Saying that lawyers who participate in such actions is neutral is like saying that the tobacco companies are neutral with regards to cancer caused by smoking. You can't have a system without it's facilitators.

That said, I know and work with a whole lot of very nice lawyers who, to my knowledge, aren't scummy.

If the problem is money, then why go after the lawyers? Why not the accountants who finance the company? Or the HR managers who organize it? Or the contractors who will be putting that factory up, or, hell, the blue-collar guys who will eventually wind up staffing it?

They're all just hard-working folks trying to make a living. They work for the corporations because the corporations have the money they need. If someone else had the money, they'd work for them instead. The only facilitator here is capital.

(Over) Simplified:

It's primarily lawyers (or at least, law school graduates) that make the laws, and they are also the ones profiting from ridiculous cases. It's up to lawyers to fix the mess that the lawyers made, that the lawyers are profiting from.

Obviously, only lawyers are happy with the situation.

As I said, this is a simplification. But it is too close to the truth for most people, and so most people dislike lawyers for "screwing things up".

They benefit from the current situation and their colleagues write the laws, so I don't imagine we'll see hordes of lawyers clamoring to change the status quo any time soon.

I can't imagine Oracle being too bothered by the sum itself, but it must be pretty embarrassing for them to be the aggressors in this case, and ask for billions in the beginning from Google, then to find out that they could only get like $35 million at most, even if they do win, and finally to lose the case, and themselves be the ones paying millions to Google.

What are the chances that they will actually receive this?

What are the chances that they will actually receive this?

An order of the court will determine the final award of costs. Both sides get to argue with the court about what's a reasonable award, but the judge decides, and I can't imagine that Oracle wouldn't follow the court's order (as it can well afford to do). Probably Google is initially asking for far more than it actually expects to get after the judge reviews the bill of costs.

Man... I gotta get back into economic consulting... $986,978 in expert witness fees.

That's probably one percent of the total lawyering costs. Maybe get into that :P

>That's probably one percent of the total lawyering costs. Maybe get into that :P

I don't think you know how much expert witnesses charge and what they do.

It's nice to see Oracle reinventing it self into SCO

It hasn't, though. Larry Ellison has shown time and time again that Oracle is just about the bottom dollar. SCO was just a patent troll, but in Ellison's Oracle, patent trolling/litigation is just another "wing" of the business of making big bucks. Oracle did the math and thought it would be worth the risk/investment of taking this all the way in anticipation of a possible payout on the scale of billions of dollars, and it didn't pan out. That's what makes this all the more annoying: this isn't their core business model, they're not SCO, but they choose to pursue this anyway.

I don't think you know much about Oracle. Aggressively defending their assets through the courts is something Oracle has a long, long history of. Sometimes they win. Sometimes they lose. But they almost never just let things slide.

Pretty sure Larry is wearing his kimono with swords by his side when he's making the decision to "go to war".

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