I’m Erin Brockovich. For over 18 years I’ve fought on behalf of innocent people who have suffered harm at the hands of irresponsible companies. Now I am working at Shine Lawyers, a firm who shares my passion for taking on tough cases. They’ve won millions of dollars in compensation for injured people. They’re the only Australian law firm I work with and trust. If you need someone tough on your side, call Shine Lawyers: 13 11 99.
Retaining the services of Erin Brockovich was a stroke of genius by Shine Lawyers. Both she and the firm share a lot in common – personal injuries, profiting off the misery of others and raking in millions. It’s scary to watch folks, but imagine the nightmare you would face if you were injured and needed their help?
Employee Share Plan
The first Shine Lawyers’ Prospectus, exclusively leaked to FS, makes some highly interesting reading. Yes, it’s confidential, but in the spirit of trick or treat, we thought we’d share. The document was prepared for the purpose of offering scrip to Shine Lawyers employees – ten million fully paid shares offered at a subscription price of 30 cents per share (raising a maximum of $3million). We think the really interesting part of the document is not the offer itself, but other details, like the “Investment Overview”. In that section of the document you’ll find:
Section 1.2 Values and Branding:
The firm has developed a powerful brand in recent years through its use of Rupert the bulldog and its relationship with Erin Brockovich… The firm is very proud of its core values of -
Always stand up for the little guy.
True to documents of its kind, the Prospectus also discloses historical EBIT:
- 2006 = $3,213,000;
- 2007 = $8,173,000;
- 2008 $10,122,000;
- 2009 = $18,182,000;
- 2010 = $23,844,000 (budget).
The firm’s revenue apparently grew by 40% in each of the three financial years prior to the offer. It would be interesting to see how the profits are split amongst the shareholders of the firm. Moreover, we’ve already published the salaries of a variety of the firm’s partners (check it out here), but we imagine that dividends to shareholders are an entirely different kettle of fish. Seeing how the millions - derived through the substantial personal hardship endured by its clientele – are split between the shareholders would be interesting indeed. You’ll recall, of course, SCQ Chief Justice De Jersey recently called for the national banning of the term “paralegal” because Shine Lawyers was ripping off vulnerable clients, charging them $300 an hour for secretarial work. We later exposed the “profit centres” Chief Justice De Jersey was talking about. Little wonder shareholders areraking in tens of millions.
Back on the current offer and the Prospectus, the EBIT and revenue stats certainly make it sound like a great deal for employees. But are there any risks? Are there any reasons why the employees should knock back the offer?
Well, in addition to the financial info, the document includes a range of Key Risks, including:
Reputation Risk
The success of Shine Lawyer’s [sic] business depends on the maintenance of good client relationships and its reputation for providing high quality professional services. The reputation of the Company could be damaged if it does not meet client expectations or is involved in high profile, unsucessful or unpopular legal proceedings.
We think “branding with Erin Brockovich” should be added the list of reputational risks. After all, she’s hardly the crusader that Hollywood or Shine Lawyers would have us believe.
Erin Brockovich’s $2million Pay Day
Most of you have probably seen the movie and no doubt some of our readers will admonish that, by even raising it, we’re delving into irrelevant and old news. While there might be some truth in this, we think the movie and the related backlash against it warrants an airing on our website, especially in circumstances where we’re all constantly confronted by the Shine Lawyers TV commercial featuring Ms Brockovich.
The plot unfolds thus: Erin Brockovich, a legal assistant, lines up over 600 plaintiffs in a small Californian town to form a class action against Pacific Gas & Electric (PGE). The allegation was that PGE’s nearby plant was leaching Chromium 6 into the town’s water storage, poisoning its residents. Ms Brokovich’s firm blamed PGE for a peculiarly wide range of physical ailments suffered by locals, including breast cancer, Hodgkins Lymphoma, uterine cancer, nose-bleeds, immunity deficiencies, miscarriages, spinal problems and many others.
PGE settled the case in 1996 for $333million. Ms Brockovich’s small suburban firm, together with two other firms, collected $133.6million in legal fees. Ms Brockovich herself trousered a staggering $2million bonus. Remember, that’s in 1996 dollars. Not bad for a secretary, but did she deserve it?
According to Wall Street Journal’s investigative journalist Michael Fumento, the answer is a resounding “no”.
In a series of exposés,Mr Fumento took aim at Ms Brockovich, her law firm, and the baseless claims they brought against PGE. Mr Fumento cited a number of studies conclusively proving that Chromium 6 could not possibly have caused the list of ailments alleged by Brockovich’s firm. In one such authority, the US Environment Protection Agency – the body responsible among other things for overseeing the minimisation of water pollutants – stated that Chromium 6 is only carcinogenic when it is inhaled (it is associated only with lung cancer and cancer of the septum). It is not, moreoever, carcinogenic when ingested by drinking. Mr Femento cited the EPA’s Integrated Risk Information System, updated in 1998:
No data were located in the available literature that suggested that [Chromium 6] is carcinogenic by the oral route of exposure.
A later study published in The Journal of Occupational and Environmental Medicine, evaluated over 50,000 workers who worked at three PGE plants over a period of 25 years. One of the three plants was the same plant – the Hinkley plant – that Brockovich and her firm alleged had poisoned the community. The researchers found cancer rates were no higher than in the general California population and death rates significantly lower than expected. Various other studies support the proposition that PGE’s leaching of Chromium 6 into the Hinkley water supply, although less than ideal, could not possibly have led to the adverse health effects suffered by the group of plaintiffs cobbled together by Ms Brockovich.
Of course, Hollywood and Shine Lawyers would never let that stand in the way of a good story. According to Mr Fumento:
The motivation of the three law firms was neither truth nor compassion, but rather 40 percent of the winnings. Their “take” from the settlement was $133 million plus an amazing $10 million more in expenses. Brockovich’s bonus alone was $2 million. Justice doth have its rewards.
Indeed. So, why did PGE settle for $333million? Well, according to Mr Fumento:
To understand why the bad guys won, it’s important to know that the case was a settlement not subject to appeal, that PG&E was suffering terrible publicity, and that as a utility it could simply pass losses on to rate payers.
There you have it. The settlement amount could just be passed off to its customers, customers who couldn’t shift their business elsewhere.
Outshining Brockovich
“How is all of this relevant?!”, we hear you exclaim. Simple, Erin Brockovich makes a small fortune through her arrangement with Shine Lawyers. We understand it to be a six figure salary, now into its third year. Six figures for an individual who has no legal qualifications, who achieved notoriety on the back of a baseless legal claim, who was enriched with millions of dollars because of that baseless claim and who now pops up daily on our TV screen. It is relevant because we’re all suffering and mums and dads are being duped by Shine Lawyers.
No wonder Michael Fumento refers to Ms Brockovich as “a truly villainous” person.
Well, we’re sick of her too. Sure, there are differences between the permissible contingency fee arrangements under US and Australian law, but the point here is that the firm has previously advertised her as a lawyer working on behalf of the firm, intimating that she’ll have carriage of individual legal claims, when in truth she has no right to work as a lawyer in Australia and little, if any, entitlement to the riches or notoriety she is leveraging off.
Enough, Erin! Grab your broomstick and fly back West!
Send the Firm Spy your news and views!
——–
UPDATE 8/11
Well folks, it’s been a hot few days in the FS kitchen which is just the way we like it. The premise of the above article is that it is time for Shine Lawyers to ditch Erin Brokovich, in part because the notoriety she now enjoys is attributable to what we thought was a baseless legal claim, but mainly because she is not a lawyer and it is wrong for the firm to hold her out as such.
We received the following feedback from an insightful commentator going by the apt pseudonym “I Call BS”, calling into question the baselessness we attributed to Ms Brockovich’s legal claims:
You’re very clever to uncritically buy and repeat the WSJ’s claims without question, but ultimately wrong. The study you mention, reported in the Journal of Occupational and Environmental Medicine, was subsequently discredited and then retracted by that journal. Why? Much of it was put together by PG&E’s consultants (as you would have discovered if you’d done a basic google search).
In fact, earlier and subsequent studies show there IS an increased risk of cancer for people exposed to chromium-6… How do you think they stack up against the EPA’s current review of chromium-6 toxicology and its draft conclusions that:
“… hexavalent chromium is carcinogenic by a mutagenic mode of action. Considering the available oral and inhalation evidence for mutagenicity and subsequent carcinogenicity and that these events are capable of occurring in all cells, this mode of action is considered to be applicable to all routes of exposure.”
Now is a probably a good time to remind our readers that you shouldn’t rely on the info you read in our posts. We’re not journos. We’re hard-working corporates, just like you. Having said that, we took a bit of umbrage with that comment because we thought it involved some selective quoting (a tactic we’re famous for) and didn’t faithfully record the criticisms of the EPA position. But it’s true, we didn’t check whether there was an updated view on the carcinogencity of Chromium 6. Apparently the prevailing view now (as of July 2011) is that there is a chance it is carcinogenic in water. Sorry everyone. We still think Shine Lawyers is ethically derelict for holding Erin Brokovich out as a lawyer, a lawyer who’ll have carriage of individual claims.
For the record, we sent the following email to the author of the Wall Street Journal articles which informed our post:
——- Original Message ——–
Subject: Request for Comment RE: Erin Brockovich
Date: Mon, 31 Oct 2011 19:47:40 -0400
From: news@firmspy.com
To: <fumento@pobox.com>Dear Michael,
Firstly – love your work.
We’re Australia’s most popular corporate blog (a bold claim, but we’re confident).
A highly sketchy personal injuries law firm – Shine Lawyers – has over the last few years used Erin Brockovich on various TV commercials and for the purposes of its branding. We’re sick of it, which led us to your thought-provoking articles on the person in question.
We’re intending to link to a few of your articles but would like also to add a specific comment from you on the fact that Ms Brockovich is still, nearly 15 years after the PGE settlement, leveraging her secretarial work to bring in cash (we understand she makes AUD$100,000 annually through the deal).
Here is the draft as it stands. We intend to put something up in the next 12 hours and would love your thoughts! [article followed]
Over the weekend, we received the following response from Mr Fumento:
——– Original Message ——–
Subject: Re: Request for Comment RE: Erin Brockovich
Date: Thu, 3 Nov 2011 22:18:03 -0500
From: Michael Fumento <fumento@gmail.com>
To: news@firmspy.comSorry I never got back to you. I’m actually in Colombia at the tail end of a three-month nightmare. I tried to move here and it just didn’t work. And for that whole time I have been trying to simply liberate my possessions from the port. Yes, three months. It’s right out of Kafka.
Fact is, say what you will about Brocko but she obviously gives the public what it wants. Mike Fumento does not. That’s why I eventually had the leave the States. While she makes millions a year by lying, I was
making nothing a year by telling the truth. I haven’t been salaried in five years, almost nobody will print my work anymore (the Wall Street Journal quit years ago), and my “fees” dwindled to near zero or usually
zero with everybody else. So has my savings. That’s why I had to quit both writing and the “do-gooder” business. I’m the flip side of Brocko. I tell the truth, and nobody wants the truth. Not in the States anyway.
They just want infotainment and they want to be lied to.The last article I published, packed as always with data and hyperlinks thereto, makes the case that the US economy isn’t just in a temporary rut or “soft patch” as they like to call it.
http://fumento.com/economy/real_crisis.html [1]
The present is the future. Unemployment will never again drop significantly. The simple reason is that Americans are unwilling or unable to compete in a global economy. Here people work six days a week.
Americans more and more are moving to a 3.5 day work week. At least white collar ones. Yet they absolutely refuse to cut expenditures. So each year the country borrows more and it exploits more those who DO continue to work. People like me. People earning $250,000 US a year were asking me to write articles, then apologizing saying they couldn’t afford to pay me anything!As I have put it, in my leaving “Atlas shrugged.” Everybody outside the US properly sees a very gloomy economic future for the US. But the government and populace, just as they believe in Brocko’s black magic, believe that somehow white magic will save the day. The term most commonly used us “American exceptionalism,” meaning that economic rules that have applied throughout history to every country are simply suspended for the U.S. To my mind, it’s a form of national hysteria. Fortune mag economist Allan Sloan even wrote that the US will always be able to pay its bills because if nothing else the Fed can just print all the money we need.
http://www.washingtonpost.com/business/economy/deals-allan-sloan-on-sandp-downgrade-of-us-debt/2011/04/21/AFtTcfkE_story.html
[2]
My God! And yet I saw nobody in the U.S. challenge him. Yes, let’s! And soon we’ll be buying break for $1,000 a loaf! No, it’s not “like” mass hysteria. It IS mass hysteria. America is a declining society where hysterias run rampant. And people like Brocko just feed into that. People like me who essentially point the obvious, such as that you can’t sustain a nation with Monopoly money, are cast aside for coming to the “wrong” conclusions.
Best,
Mike Fumento
Loading...
I can understand why you’ve taken aim at Shine Lawyers and Erin Brockovich. But you also seem to have a problem with personal injuries lawyers in general. Why? In your opinion, which losses should be compensated, and which should be left to lie where they fall? You seem to think that lawyers should only act on behalf of wealthy corporate clients or government agencies. (No, I’m not a personal injuries lawyer.)
You also seem to have a problem with secretaries and in different post referred to the work they perform as “lowly”. While secretaries may not have legal qualifications (although some do, usually because they were unable to secure a graduate placement). While you clearly demonstrate little respect for the work they perform, Erin Brockovich earning a 2 million dollar bonus is between her and the firm she worked for. She clearly worked hard to deserve it, irrelevant of whether the case is baseless or not (which is for a court to decide, not FS).
Off topic, but on the topic of secretaries generally, you should also keep in mind that secretaries have a wealth of knowledge of software programs to prepare your legal documents, know key clients and most importantly, have access to partner emails which allows us to know before you do of any significant news, which is especially important in times of redundancies and cut backs. On a personal note, I work at Clutz, and I for one am relieved that I get to leave at 5pm every day and not have to work obscene hours or become caught up on their bully boy culture.
Firm Spy, not everyone has the opportunity, means or ability to undertake a university degree, especially one as difficult and as time consuming as law. A law degree gives you the opportunity to practice law, not make snide remarks about someone who chooses a different path to you.
Good stuff – interesting reading.
@ Andrew – fair point. We tend to find personal injury lawyers behave the worst. It’s a shocking situation because the stakes are higher – we’re talking about money a disabled person is awarded because of their personal injury. Imagine losing $300 out of that settlement for an hour of secretarial work? WTF!?
@ Amy – cheers for the feedback. We obviously disagree strongly with you. We used the word “lowly” adjectivally to contextualise the outrageousness of paying $300 for an hour of secretarial work. It wasn’t a reflection on the importance of secretaries more generally. Far from it. For the record, we’ve been a champion of the rights of non-fee-earner staff for over three years and could point to any number of articles to prove it. Let’s take your own employer Clayton Utz – who else commented on the discrimination faced by Clutz shared services employees forced to wear name tags?
Having said that, we take on board your comments. We’ll soon be publishing support-staff salary info which will interest you, so be sure to check it out.
Re Amy – I agree. Lawyers are wankers.
The real question is how the lawyers representing Pacific Gas & Electric can justify their existence. Their client paid out $143 million for a case with no prospects? Must have been real sharp operators.
@ The Spy – fair cop, guys – there’s plenty of honest, hard-working, ethical PI lawyers who DON’T charge their clients for support staff. Hard to see any basis for your view (other than anecdotal evidence) that “personal injury lawyers behave the worst”.
You’re very clever to uncritically buy and repeat the WSJ’s claims without question, but ultimately wrong. The study you mention, reported in the Journal of Occupational and Environmental Medicine, was subsequently discredited and then retracted by that journal. Why? Much of it was put together by PG&E’s consultants (as you would have discovered if you’d done a basic google search).
In fact, earlier and subsequent studies show there IS an increased risk of cancer for people exposed to chromium-6. What “various other studies” do you rely on to support your assertion to the contrary? How do you think they stack up against the EPA’s current review of chromium-6 toxicology and its draft conclusions (http://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=221433) that:
“… hexavalent chromium is carcinogenic by a mutagenic mode of action. Considering the available oral and inhalation evidence for mutagenicity and subsequent carcinogenicity and that these events are capable of occurring in all cells, this mode of action is considered to be applicable to all routes of exposure.”
?
And I wonder if you’d tell a Hinkley resident to their face (those who are still alive, anyway) that their claims were “baseless”?
—
The Spy
Excellent response, but rubbish. We’ve read the draft report and your selective quoting belies the conclusions of the learned reviewers whose comments on the carcinogenicty of chromium 6 suggest otherwise. If we get a chance we’ll extract them for the benefit of our readers. We’ve got alot on tonight though
“We think “branding with Erin Brockovich” should be added the list of reputational risks. After all, she’s hardly the crusader that Hollywood or Shine Lawyers would have us believe.”
If, as you say, the final prospectus refers to the fact that “[the] firm has developed a powerful brand in recent years through its use of Rupert the bulldog and its relationship with Erin Brockovich”, I agree with your view that one of the “specific risks” identified under the prospectus should be a deterioration of the key relationships and branding of the firm, making specific references to Rupert the bulldog and Erin Brockovich. Though whomever is drafting said prospectus would surely know this if they are familiar with the corps act and the relevant ASIC reg guides.
@ The Spy: look forward to seeing what other reasonable conclusions you would draw from the EPA (given their final conclusion that it is “likely to be carcinogenic to humans via the oral route of exposure … based on a statistically significant increase in the incidence of tumors of the oral mucosa and tongue of rats and the small intestine of mice, and evidence of an association between oral exposure to hexavalent chromium and stomach cancer in humans” at para 6.1, page 239. Have you really read the report?!
Also look forward to hearing about the “various other studies” you say support your conclusions, and why you think quoting the JOEM findings without noting that they have been withdrawn (and the relevant circumstances in which they were withdrawn) is not itself unfair/selective/self-serving. Don’t let the truth get in the way of your workload.
@ I Call BS
just did a “basic google search” and couldnt find the retraction of the article that you mentioned. In terms of the EPA’s conclusion – where did you get that from? I just looked at the study and found the following expert conclusions from earlier this year on whether Chromium 6 is a carcinogen:
Byczkowski – “The classification of hexavalent chromium as “likely to be carcinogenic to humans by the oral route of exposure” is based on carcinogeniesis observed only at the highest dose levels employed in animal studies. Therefore, it may, or may not be relevant to humans at environmentally relevant exposure concentrations.”
Hamilton – “I am is concerned that the evidence for carcinogenicity is not strong in animals and is not supported by human epidemiology.”
Patierno – “The cancer weight of evidence characterization is not scientifically supported. The conclusion that hexavalent chromium is “likely to be carcinogenic to humans by the oral route of exposure” is not scientifically supportable”
Rossman – “Given the fact that there is not enough human data to firmly establish carcinogenicity, but there is animal data, “likely to be” is reasonable but “possibly carcinogenic at high dose” would be more accurate.”
Wise – “In studying the data and descriptors, it appears to be premature to conclude that the weight of the evidence is nearly adequate for demonstrating carcinogenic potential to humans.”
Let’s keep in mind that you were citing draft conclusions and, in any event, the afflictions suffered by the 600+ plaintiffs in Brockovich’s class action were much wider than just cancer.
Let me guess, you’re also disputing the claim that Brockovich was drvien by the 40% take in representing the clients?
@ Not BS: retraction: http://classic.the-scientist.com/news/display/23590/
conclusion: see the EPA’s report (not the peer review comments) p239, para 6.1. you’re not quoting studies but comments from a peer review. FS asserted that various studies proved chromium-6 is safe; is it unreasonable to ask which ones?
Not arguing about the contingency arrangement, but about the fact that this article is a beat-up that isn’t reported in a balanced way. Clearly there are differences in scientific opinion about chromium-6 toxicity in humans – but the premise of the article is that it has been conclusively determined that chromium-6 is safe, and that the Hinkley claims were baseless.
The JOEM issue alone (on which the entire premise of the article is based, along with the other studies FS asserts supports its/the WSJ’s view) is enough to demonstrate that FS isn’t, on this occasion, giving the full picture.
@ I Call BS
That link doesn’t even state whether the retraction took place! Note also the comment that there was “no scientific fraud” and the retraction was based purely on a failure to disclose financial contribution to the study. Forgive me, but I think you are the one who is being less than sincere about “giving us the full picture”!
@ Not BS – you’d see if FS published an earlier comment that I invited them to tell us about the full details of the retraction (which did happen). Curiously that comment is still “awaiting moderation” though both your and my later comments have been published.
Nice spin, but your logic is twisted. No scientific fraud, but people paid by PG&E write parts of a report clearing chromium-6 without disclosing their interest – couldn’t possibly be relevant to the veracity of the study, could it? No conflict of interest at all, right? And you’re attacking me for pointing out that there are some obvious holes?!
Nice trolling – some myopia you’re lumbered with. You ‘ve missed my entire point
. All I want to know is how FS justifies its assertions in this article, all based on the premise that chromium-6 is safe and that the Hinkley litigation was baseless, when there is clearly some controversy amongst scientists about whether or not chromium-6 is actually safe? What are the studies that FS claims show that there is unrebuttable evidence that chromium-6 is safe?
Geez FS, it’s a bit much to be accusing a firm of legal practitioners (no matter who they are) of being “highly sketchy”, isn’t it? I’m all for robustness, but I cringe at such a generalised accusation.