LAWYERS' FEES IN THE BIG TOBACCO ASE INVITE A REVOLT

Five law firms representing Ohio hit the jackpot: a combined fee of $265 million for suing Big Tobacco in one of the many cases that helped forge the national tobacco deal.

Big as it was, their windfall is but a small portion of the record-shattering fees awarded in the past 17 months to trial lawyers who sued the industry on behalf of the states. The lawyers' take so far: $10.4 billion.

Hard to fathom? Try this. The $575 million award for lawyers representing Louisiana works out to $6,700 an hour, according to an arbitrator's dissenting decision.

Louisiana wasn't close to setting records. In Texas, seven firms got a total of $3.29 billion. Florida doled out the biggest prize: Twelve firms split $3.4 billion

There's more to come, as dozens of firms await their turn before an arbitration panel set up to decide fees in the huge settlement.

Even though the cost is paid by tobacco companies, limiting public sympathy, the obvious unfairness touches a nerve. It invites a dangerous backlash against the kind of innovative legal arrangements that finally allowed states to take on Big Tobacco.

For decades, the cigarette makers and their armies of lawyers crushed anyone who challenged them in court. But starting in 1994, when a handful of wealthy private lawyers combined their resources with the public muscle of state attorneys general, the power equation reversed. Tobacco lost.

Certainly, the lawyers who sued the industry early in a series of risky, pioneering cases deserve handsome reward. If they'd lost, they wouldn't have been paid anything.

But some winners of huge legal fees came to the battle late, when the risk was minimal and the document digging was done. And some who represented many states are being paid repeatedly for piggyback efforts.

These mega-paydays grow from a legal system that typically pays plaintiffs' lawyers under an all-or-nothing contingency strategy. The goal is to encourage lawyers to take on risky cases for people who can't afford to hire a lawyer on hourly rates. It gives injured parties at least some chance against companies that can outspend them 1,000 to 1.

But when the stakes move into the stratosphere -- as they did when the tobacco industry settled for $246 billion -- fees justified on a straight percentage become disconnected from the value of work done or risk taken.

The first mistake came when many state attorneys general, who should know better, negotiated fee contracts for straight percentages with no sliding scale for a huge recovery. The second came when some attorneys, lusting after mega-fortunes, insisted on holding the states hostage to those deals.

[Editor's note: Lawyers were hired on a percentage basis by Missouri Attorney Jay Nixon to represent the state in its tobacco lawsuit. Under the terms of that fee plan, the lawyers would have received more than $400 million in fees. The fees now will be decided by arbitration, but still could wind up being as much as originally planned.]

Now nasty feuding over the fat-cat fees is fueling outrage over the very legal partnerships that can benefit the public. Already, Texas has passed a bill making it far more difficult for the state to hire private lawyers. The U.S. Chamber of Commerce is lobbying for federal legislation that would not only limit states' ability to hire private counsel, but also give added protection to industries.

Put those proposals in the context of tobacco, and the absurdity becomes obvious. Companies that lie about a product's danger, as the tobacco companies did, would be protected. Consumers would be harmed.

The national tobacco deal doesn't deserve such a sorry legacy. Nor do lawyers deserve lottery-size awards. Fees should be capped.