They stood shoulder to shoulder, 25 dark-suited lawyers jammed like cordwood into the sixth-floor chambers of the city courthouse, more lawyers than Circuit Judge Joseph H.H. Kaplan says he has ever seen in his chambers at one time before.
Each carried a briefcase bearing a piece of the action that brought them there: Old Court Savings & Loan.
Another 10 to 15 lawyers waited anxiously outside in Kaplan's domed courtroom on that recent Monday morning. An additional 15 or more were involved in preparations for the proceedings -- an early skirmish in the litigation triggered by accusations of mismanagement and improper loan practices at Old Court.
"I've never seen such a mob scene," said William G. Hundley, a noted Washington criminal lawyer and one-time Watergate defense attorney who represents Old Court owner Jeffrey A. Levitt.
"It's like a Who's Who of lawyers," said D. Robert Enten, one of four Baltimore attorneys for an accounting firm that kept Old Court's books.
The lawyers -- at least 55 by the latest count -- are part of a lucrative, burgeoning industry of litigation and real estate appraising that has sprung up in the state's savings and loan crisis. Rapidly growing ranks of lawyers and banking specialists have been hired by the myriad players in the crisis -- Old Court officers, officials of the now-defunct private insurer Maryland Savings-Share Insurance Corp. (MSSIC), even state government officials.
One lawyer estimated that an $800 million lawsuit against 38 Old Court-related defendants in Baltimore County has generated more than $100,000 in lawyers' fees since it was filed in June.
At the same time, at least eight real estate appraisal firms employing dozens of professional appraisers in Baltimore and elsewhere have been approved by Kaplan to evaluate Old Court's far-flung property ventures to determine whether they are financially sound or should be liquidated.
Several appraisers reported that they are so busy with Old Court assignments they have turned down other work. "Basically, we've had to turn off the faucet," said Patrick C. Kerr, president of the Legg Mason Appraisal Group.
"It's going to turn out to be a multimillion-dollar industry," said a lawyer close to MSSIC who asked not to be identified.
The lawyers hired in the savings and loan crisis include special advisers to Maryland Gov. Harry Hughes, $200-an-hour defense attorneys from some of the most prestigious law firms in Baltimore and Washington and at least two Watergate veterans, one of them Hundley.
They represent defendants and potential defendants in a tangle of civil lawsuits and criminal investigations at the state and federal levels that has left lawyers confused and created a paper work nightmare for court clerks and legal secretaries.
"From a management standpoint, it's a bit of a problem," acknowledged Kaplan, the city Circuit Court's administrative judge and manager of much Old Court litigation. "But so be it."
The $800 million class action lawsuit in Baltimore County against Old Court on behalf of its 60,000 to 65,000 depositors lists Levitt, Old Court and 36 other corporate and individual defendants. A $200 million-plus suit filed in Baltimore City by the Maryland Deposit Insurance Fund (MDIF), the state-created conservator for Old Court and the successor to MSSIC, lists 26 defendants.
"We're going to have a circus out there," said Lawrence I. Weisman, the attorney who filed the class action suit in Baltimore County.
"Logistically, it's a nightmare," said James P. Ulwick, an attorney for Old Court part owner Allan H. Pearlstein. "Whenever I file a motion, I have to attach a certificate saying I served everyone by mail. Just the certificate runs about four pages."
Clients have had to scramble to find available law firms or individual lawyers who do not have conflicting interests in the state's sprawling network of competing savings and loans institutions.
Charles C. Hogg II, former president of the MSSIC, the private insurer of state-chartered savings and loans that has been replaced by the MDIF, reportedly had difficulty finding a lawyer. "I reviewed a number of counsel to select the counsel I now have," Hogg said in an interview, declining to comment further. His attorneys are James H. Cook and John H. Zink III of the Baltimore firm of Cook, Howard, Downes & Tracy.
Ironically, one of Baltimore's premier law firms, Venable, Baejter and Howard, with more than 110 lawyers, has found itself boxed out of the current swirl of litigation fees. A victim of alleged conflict of interest because its lawyers have represented both MSSIC and Old Court in the past, it has had to hire lawyers from another law firm, Covington & Burling of Washington, to represent it in the class action suit. Among the lawyers is Charles F.C. Ruff, a former U.S. attorney in Washington and the last of the Watergate special prosecutors in the mid-1970s.
In another twist, lawyers hired by the state of Maryland to represent MDIF as conservator of Old Court have ended up suing several Old Court subsidiaries in one case and defending others in a second case.
The attorneys, led by Shale D. Stiller of Frank, Bernstein, Conaway & Goldman, filed the lawsuit for more than $200 million against Old Court officers and 13 real estate subsidiaries, accusing the officers of the "largest financial fraud in the history of the State of Maryland." They asked that the officers' assets be frozen to help assure that Old Court depositors retrieve money placed in the real estate ventures.
At the same time, the MDIF and two other Old Court subsidiaries were named in Weisman's class action lawsuit in Baltimore County. The suit puts Stiller and the other MDIF attorneys in the position of representing the interests of Old Court depositors in a suit brought by a lawyer, Weisman, claiming to represent the same depositors.
The MDIF lawyers "are charged with doing everything they can to preserve Old Court assets," said MDIF spokesman Norman Silverstein. "They have the depositors at heart . . . . That is not incompatible with representing those [two] Old Court entities" in the Weisman suit.
Stiller and other MDIF lawyers are being paid from Old Court assets, Silverstein said.
The pay rates for several private lawyers advising Hughes' office on how to assist state-chartered thrift associations in obtaining federal insurance were not immediately available, but Silverstein said the lawyers customarily charge somewhat less than the prevailing commercial rate when performing state service.
Still another set of private attorneys, led by Wilbur D. Preston of the Baltimore firm of Whiteford, Taylor, Preston, Trimble & Johnston, has been appointed by Hughes as special counsel to investigate the causes of the state savings and loan crisis. They are being paid by a $500,000 appropriation approved at an emergency session of the General Assembly in May.
Lawyers generally were unwilling to discuss their fees, but fee schedules listed in a recent federal court case in Baltimore indicate that fees in civil litigation range as high as $275 an hour among senior lawyers in Washington firms and $210 in Baltimore.
Senior lawyers at Arent, Fox, Kintner, Plotkin and Kahn, a Washington firm that has two attorneys representing former MSSIC board chairman John D. Faulkner, charged $250 an hour in 1983, according to the fee schedule. Covington & Burling charged $190, and Frank, Bernstein, Conaway and Goldman $150, according to the schedule. Rates in Baltimore and Washington have since gone up, the court papers said.
Hundley, who represents Jeffrey Levitt in the joint state-federal criminal investigation of Old Court, does not charge by the hour. Criminal attorneys, he said, customarily "accept a substantial retainer" in advance, "which we bill against." He would not specify the amount in Levitt's case.