Boston Bonanza

Lawyer's fee draws fire

For Boston University Law Professor William Schwartz, the holiday season got off to a fast start last week. Massachusetts authorities announced an agreement that gives him a $799,000 fee for negotiating a settlement in a dispute involving a fleet of trolley cars claimed to be defective. Because the cars kept jumping the track, the Massachusetts Bay Transportation Authority (M.B.T.A.) wanted them modified by the manufacturer, Boeing Vertol Co. In September, after a year of futile negotiations, Schwartz, a products-liability expert, was hired. Before the M.B.T.A. and Schwartz could agree what his remuneration would be, he extracted from Boeing Vertol a settlement calling for $40 million in cash, including the sizable attorney's fee, in addition to other concessions. The cars originally cost $52.9 million.

The size of Schwartz's fee troubled many Bostonians. A transit authority spokesman noted that Boeing Vertol --and not the M.B.T.A.--had to pay the legal bill. "An outrage," countered influential State Representative Barney Frank. "The size of the fee had to have some effect on the size of the settlement."

Schwartz's defenders note that both in absolute dollars and as a percentage, his fee is smaller than that awarded in a San Francisco transit settlement. Critics, however, see the Boston circumstances as different: Schwartz was involved in the suit for only two months rather than years, on behalf of an agency that depends on taxpayers to cover two-thirds of its budget. As Frank puts it, "When the public sector is as desperately poor as it is, no one ought to get rich off it."

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