A fee factory? The study, by the well-known Stanford law professor Joseph Grundfest tallied every shareholder case since 2000 in which lawyers won fee “multipliers” of 7 times (“septuples”) or 10 times (“decuples”) their normal hourly rate from big corporations.
Here’s what it found:
Delaware produced 21 septuples and 14 decuples, almost matching the entire federal system on septuples and nearly triple on decuples.
One payout for a lawyer practicing before Delaware’s Court of Chancery worked out to an astonishing $35,000 an hour. Some lawyers are walking away with multipliers of 66 times their standard rates.
Just two chancery court judges handed out a majority of those supersize awards, so it matters which judge you get.
The deepest costliest hardest to root out forms of corruption involve cooperating yet independent corrupt persons and institutions. You know, evolution over time via signaling — it’s not just for bees and flowers and humans and pornography, it’s wired into physical reality.
Delaware needs an impossibly rare hit by a big asteroid, or an nationwide uprising of enraged independent investors, and I hate to tell you which is more likely at this point.
We seem to actually stand in need of a revolutionary refounding??!
That nut Jefferson mused on this long ago:
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.It is its natural manure.”
The latest example came Wednesday when a high-profile venture capital firm, Andreessen Horowitz, announced it would move the incorporation of its primary business, AH Capital Management, from Delaware to Nevada as it offered a critique of Delaware’s powerful business court. The VC firm long associated with Marc Andreessen accused the state’s Chancery Court of injecting “legal uncertainty” into Delaware’s reputation as the gold standard for corporate law…
Seven publicly traded companies with market caps ranging from $1.5 billion to $71 billion have also asked their shareholders to vote in favor of leaving Delaware for Nevada during this year’s proxy season, and investors said yes to all of the departure proposals…
And Bill Ackman, Pershing Square’s CEO, announced his own decision to reincorporate in Nevada in an X post earlier this year, saying that “top law firms are recommending Nevada and Texas over Delaware.”