Legal News

Law Blog 8-K Footnote of the Day: On Legal Fees and Dead Frogs

By Ashby Jones

There’s a company out in Seattle called Expeditors International. Expeditors is a global logistics and freight company — not exactly the type of company you’d expect to weave a good dose of humor into its 8-K filings.

But not only have they achieved the difficult task of crafting an SEC filing that made us laugh out loud, they’ve done it in a discussion of a topic near and dear to our hearts: legal fees! (Hat tip: Footnoted.org). Click here for the 8-K.

The very quick backstory: In 2007, the company was hit with a antitrust-related DOJ request asking the company to “produce certain information and records relating to an investigation of air cargo freight forwarders.” The company lawyered up, and has since dealt with follow-up inquiries from EU antitrust regulators.

In its latest 8-K, filed on Tuesday, the company responded to “selected inquiries.” One such inquiry read, in part:

Do you anticipate any incremental legal expense associated with the European Commission's additional request for information at your U.K. subsidiary in connection with the ongoing freight forwarder investigation? What do you expect your total Legal and associated costs in 2009 to look like compared to 2008?

As to the last part of the query — this year’s legal spend as compared to last year’s, the company answered:

When you come from a frame of reference, as we do, where $0 spent on legal expense would be the most preferred alternative, having to predict anything beyond that, by its nature, would become inherently and incredibly biased towards our own wants, desires and expectations. To us, this is somewhat akin to being asked to predict how many minutes after being force fed a dead frog we would throw-up…and the operative word is "force," as we'd never elect to do either on our own. In both cases (the legal fees or swallowing the dead frog) we're certain we would eventually throw up. In neither case do we know exactly how much money or how much time would pass before we did. In both cases, however, our gut check, no pun intended, is not very much and not very long! It should go without saying that given our druthers, we'd rather not spend the legal fees or eat the dead frog in the first place. Sometimes you don't get the luxury of deciding what you have to eat. When you do, and it's unpalatable, it should be obvious that you would eat as little as possible. What we are certain of is that if we were talking about being force fed dead frogs and not incurring excessive legal fees, people would be content accepting at face value that it would be as little as possible.

Says Footnoted.org: “We're not sure who Expeditors outside counsel is, but it's probably a pretty safe bet that they don't like their billable hours being compared to the force-feeding of dead frogs.”

Full post as published by Law Blog - WSJ.com on June 24, 2009 (boomark / email).