While they wait on opioid jackpot, plaintiffs firms take federal loans during pandemic
By Daniel Fisher
Law firms leading multidistrict litigation against the opioid industry have borrowed as much as $102 million under the federal Paycheck Protection Program designed to preserve jobs amid the COVID-19 pandemic. The law firms said the loans were needed to pay some 3,000 employees.
Most of the law firms operate under contingency fee contracts, meaning they only earn fees when they win verdicts or negotiate settlements. The firms comprising the Plaintiffs Executive Committee in the opioid MDL largely represent government plaintiffs, including some 3,000 cities and counties and a number of states promising them 20-30% of any winnings.
Those firms have maintained the pace of work despite the COVID-19 crisis, with the docket in the federal opioid MDL showing more than 150 entries since early March. Estimates for an eventual settlement figure plaintiffs firms around the country will be splitting billions of dollars in fees.
The biggest borrower under the PPP program was Morgan & Morgan, a personal injury firm in at least 16 states, according to Treasury Dept. records. The law firm borrowed $13 million to $45 million, according to the ranges reported by Treasury, to support 1,400 jobs including 469 employees in its Tampa office and 334 in a Jacksonville office described as providing “office administrative services.”
Morgan & Morgan didn’t respond to a request for comment. The firm has estimated annual revenue of $500 million to $600 million and founding partner John Morgan and his wife Ultima, also a firm partner, are estimated by Orlando Magazine to be worth $500 million or more.
According to its site, Morgan & Morgan employs more than 420 attorneys, 305 paralegals and a support staff of more than 2,000 people.
Under the terms of the PPP program, the government will forgive loans that are used to meet payroll and other specified expenses including rent and utilities. Many plaintiff law firms already rely on outside investors for their operating funds, including hedge funds and other entities that sometimes lend them money on terms that provide them a percentage of contingency fees. The PPP program therefore may be reducing the amount of money these firms need to borrow from other, more expensive third-party sources.
Other firms on the PEC that accessed the PPP program include:
Motley Rice, which borrowed $5-10 million to support 379 jobs
Lieff Cabraser, $2-5 million to support 215 jobs.
Levin Papantonio, $2-5 million to support 315 jobs.
Baron & Budd, $2-5 million to support 237 jobs.
Seeger Weiss, $2-5 million to support 237 jobs.
Weitz & Luxenberg, $5-10 million to support 416 jobs
Keller Rohrback, $2-5 million to support 127 jobs
Simon Greenstone, $1-2 million to support 57 jobs.
Napoli Shkolnik, $1-2 million to support 104 jobs.
Simmons Hanly Conroy, Spangenberg Shibley, Skikos Crawford and the law firm of Mark Lanier were the only firms on the opioid PEC to forgo PPP loans, according to Treasury Dept. records.