It was incorrectly reported in an article Sunday that the Justice Department placed a $100-million-a-year cost estimate on a bill to allow small businessmen to recover attorney fees when they win cases against undue government regulation. The estimate is closer to $25 million a year, a Justice official said. CAPTION: (NEW-LINE)Picture, Griffin B. Bell

A lawsuit is a fruit tree planted in a lawyer's garden.

Italian proverb

There was fire in the eyes of Attorney General Griffin B. Bell as he warmed to the subject of lawyers and the fees they charge the government.

"We aren't here to make lawyers rich," he said the other day in discussing what he sees as a governing trend of private attorneys charging the government excessive legal fees.

The object of his ire: A $160,000 fee awarded a leading Washington law firm after it won a sex discrimination case against the Labor Department.

That fee is five times larger that the court's award to Dolores Copeland, the victim of the job discrimination.

Bell aides say the attorney general was particularly upset because the firm, Wilmer, Cutler & Pickering, charged the government higher fees for the junior associates who handled the case than the maximum rates it cited in its legal papers for using senior associates.

Under the so-called "American rule," parties in lawsuits usually pay their own legal fees. But a growing number of statutes-including some civil rights, Freedom of Information and environmental laws-now allow attorneys winning cases against the government to seek legal fees from the government.

The rationale is that recovery of "reasonable" fees is necessary to encourage private attorneys to take cases many individuals otherwise wouldn't be able to afford.

The problem always has been to define "reasonable." Awards can vary widely from one court to another. The prevailing practice has been for attorneys to charge "marketplace" fees, whether they are partners in a prosperous frim like Wilmer Cutler or low-salaried members of a public advocacy law firm.

Now the D.C. Circuit Court of Appeals has handed down two opinions challenging "marketplace" fees that have the public advocacy bar reeling. And in the Copeland case, at least, longtime appeals court judge Bell has joined his former brethren.

In Copeland, the appeals court told the district judge to try again on Wilmer Cutler's $160,00 fee, and suggested that a "cost-plus" reasonable profit formula be used.

In the other case, a Privacy Act suit won by John H. Anderson, a panel ruled that his attorneys were entitled only to expenses-not the "marketplace" fee they billed-because they are salaried employes of a union.

In asking the full court of appeals for a rehearing in the Copeland case, Wilmer Cutler partner Gary D. Wilson acknowledged that the "cost-plus" formula would result in a lower fee for his firm.

Asked if that wasn't an admission that Wilmer Cutler had overcharged the government, Wilson said: "We never argued our rates are necessarily reasonable. We just put them forward as our rates." The rates they cited ranged for $52 to $90 an hour and averaged $57 an hour for the 3,600 hours the firm put in on the Copeland case.

Several top Justice Department officials sided with Wilmer Cutler and recommended that Bell support its bid for rehearing. They did so because of fears voiced by public advocacy groups that a challenge to "marketplace" fees might discourage private lawyers from taking worthwhile cases.

This, they argue, would block the nation's poorest people from equal access to the courts-a theme that has been a constantly stated goal of Bell's tenure as attorney general.

Though Bell overruled their recommendation, his aides insist the attorney general is not opposed to "reasonable" fees in cases won against the government. They say the fears of the public advocacy groups are premature.

And they hint the public advocacy lawyers are backing prosperous Wilmer Cutler because they fear the loss of the indirect governments subsidy to their operations that high "marketplace" fees represent.

Some public advocacy lawyers acknowledge the irony of their support for Wilmer Cutler. And most freely admit they count on attorney fees against the government to support other activities.

But they consider Bell's view on the Copeland case short sighted. "He's not taking the braod view of the impact on civil rights enforcement in general," said Steve Ralston, of the NAACP legal Defence Fund in New York.

Davis of Wilmer Cutler indicated that his firm would rather forgo a fee than open its books to court scruting of billing procedures in a "cost-plus" fee determination.

He noted that the firm doesn't depend on such cases for its income and, in fact, donates fee awards to public advocacy groups. But he said Bell's support for "cost-plus" fee in Copeland could have a "chilling effect" on small private practitioners in civil rights cases.

It is certainly clear organizations such as the American Civil Liberties Union and the NAACP Legal Defense Fund have been unnerved by the two recent rulings in the D.C. appellate ciruit.

"Each case qualifies as an earthquake of 3 on the Richter scale," said Charles Halpern, director of the Institute for Public Representation at Georgetown University. "But put them together and the effect is a 10."

Mark Lynch, an ACLU attorney here, said he was worried about the Anderson expenses-only decision, especially, because ACLU lawyers, like the union, work on salary. Lynch said his office was planning to hire a new lawyer this summer with income from expected fees in cases against the government. "Now it looks like we may have to alter these plans," he said.

The dabate about private attorney fees against the government isn't confined to Washington.

In California, the state legislature has refused to appropriate $800,000 won by a public advocacy firm in a case that forced the state legislature to equalize school district funding between rich and poor communities.

In Arizona last month, Sen. Dennis DeConcini (D-Ariz.) held hearings on his bill to allow small businessmen to recover attorney fees if they sue and win cases against government regulators.

Bell opposed the bill because of estimates it could costs the U.S. Treasury hundreds of millions of dollars. The Justice Department has proposed a narrower definition for government liability in such cases. But officials admit even that could cost $100 million a year, nearly a one-fourth as much as the entire budget of the federal courts.

Bell has proposed opening the Treasury to liability from another direction, in an effort to change the system where Justice hires private attorneys to defend individual government employes accused of violating citizens constitutional rights.

Justice has paid more the $2 million to private firms over the past few years mostly to defend intelligence agency officials who were sued after revelations about government spying.

Bell has tried to cut those fees, by lowering the maximum hourly rate the department will pay for $75 to $60 an hour.

But his proposed solution is to amend the Federal Tort Claims Act to substitute the United States as a defendant in such cases because the government can more afford to pay. Aides acknowledge this appears to contradict the very argument-protecting the government purse-that he is making in the Copeland case.

Justice Department officials say the "cost-plus" suggestion in the Copeland case will only be cited in other claims the department feels are "grossly excessive."

Public advocacy lawyers complain that such wrangling over attorney fees could result in lenghtier litigation than the underlying case. "Now the attorneys need attorneys," one said. They also argue that the government should be obligated to pay sizable fees in some cases because it was government stalling on losing positions that prolonged the litigation.

Last summer, for instance, the Justice Department agreed to an "interim" payment of just under $200,000 to attorneys for the sons of Ethel and Julius Rosenberg, who spent three years suing the government over documents involved in their parents' spy case convictions in 1953.

Such settlements seem less likely in the future if the new court trend continues.