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	Local Law Firm Becomes Go-To Counsel for Catholic Dioceses in Bankruptcies Milwaukee Journal Sentinel January 19, 2011 http://www.jsonline.com/business/114251519.html Most Milwaukeeans know Quarles & Brady as one of the city's premier law firms, with century-old roots and the second-largest roster of attorneys in Wisconsin. But the recent bankruptcy filing by the Archdiocese of Milwaukee brings to the fore a little-known aspect of Quarles' business: It has represented more Catholic dioceses in bankruptcies stemming from clergy-abuse claims than any law firm in the country. The score isn't even close. To date, eight such cases have been filed. Quarles led the reorganizational team in three of those, for the dioceses of Tucson, Ariz.; San Diego; and Fairbanks, Alaska. Now it is poised to participate in a fourth case, as special counsel to the Milwaukee Archdiocese. No other law firm has represented more than one diocese in the bankruptcies. For its unusual success in this unusual niche, Quarles can thank a single lawyer, according to Iowa bankruptcy attorney Richard A. Davidson, who represented the Diocese of Davenport in its case. "Susan Boswell," Davidson said immediately. "She's become an expert on diocesan bankruptcy cases." The managing partner of Quarles' Tucson office, Boswell has become something of a go-to choice for dioceses contemplating Chapter 11. Quarles would not comment for this article. But others were less reticent. "Let me put it this way," said Ford Elsaesser, an Idaho lawyer who has represented parishes in two of the bankruptcies and knows Boswell. "If I ever got a call from a diocese here in the Northwest, like Helena or Yakima, and (they) wanted a recommendation to be the diocese lawyer, there'd be only one recommendation - that would be her." Just as Boswell's reputation and experience in handling church bankruptcies have risen, so have her fees. Six years ago in Tucson, she billed $300 an hour. A few years later, in San Diego and Fairbanks, her hourly rates were $450 and $480, respectively. In Milwaukee, Quarles has said in a court document that it expects to charge $600 an hour for Boswell's services. That's the highest rate of any of the 28 lawyers expected to represent the archdiocese in some capacity. Speedy resolution Boswell and Quarles made their mark with the speedy, relatively amicable resolution of the Tucson case, the second of the diocesan bankruptcies to be filed. The case began in September 2004, and within about 10 months the diocese had settled with abuse victims and had an approved reorganization plan in place. "Susan worked incredibly hard to make that case work smoothly, quickly and without unnecessary legal expenses," Phoenix attorney C. Taylor Ashworth said via e-mail. Ashworth was a key lawyer in the Tucson bankruptcy, representing the committee of "tort creditors" - the people with abuse claims. "She used her toughness on the insurance companies that had exposures to these cases," he said of Boswell, "and worked with our committee to persuade claimants that a bankruptcy plan funded primarily with insurance proceeds would produce the best and quickest results." Meanwhile, the two other early church bankruptcy cases, those of the Archdiocese of Portland in Oregon and the Diocese of Spokane in Washington, dragged on contentiously for more than two years each. "People looked at Tucson as sort of a role model of a successful case, and I'm certain that's why (Boswell) was involved in San Diego and Alaska," Elsaesser said. In fact, court filings by the dioceses in San Diego and Fairbanks specifically cite the work of Boswell and Quarles in Tucson, but also indicate the firm has handled many other cases for the church. Both dioceses, seeking court approval to hire Quarles, used the same language: "Of particular relevance to the Debtor is the unique and extensive experience that Ms. Boswell and the team she has assembled have in representing distressed Catholic Dioceses throughout the United States in negotiating settlements of sexual abuse tort claims, and with out-of-court and bankruptcy court supervised restructurings." Staying on message Marci Hamilton, meanwhile, sees another factor at work. A professor at the Benjamin N. Cardozo School of Law in New York, Hamilton has represented victims in clergy-abuse cases, including the bankruptcies in Portland, Spokane and San Diego. She said the Catholic Church is a hierarchal organization that tends to stick with decisions once they are made. "You're going to see them inclined to go back to counsel that has served them well and that they're comfortable with," Hamilton said. "The other part of it," she said, "is the church has an interest in being consistent in the way it explains itself in these cases. And in order to have the message be consistent, it's helpful to have the lawyers be consistent." So why did the Milwaukee Archdiocese choose Whyte Hirschboeck Dudek rather than Quarles to lead its bankruptcy case? The answer, curiously, may lie in the fact that Quarles has been the archdiocese's principal legal adviser for at least 30 years. One expert who asked not to be named said companies often don't want their regular legal firm handling their bankruptcy reorganization. That's because the firm's duties as bankruptcy counsel may end up conflicting with advice it has given the company in the past, he said. "In a bankruptcy, everything's fair game," he said. "All kinds of questions get asked." He said that if a company or organization doesn't want to use its regular law firm as its chief bankruptcy adviser, the firm typically is retained as special counsel - Quarles' role in the Milwaukee Archdiocese case - because of its deep knowledge of the client's affairs. Ralph Anzivino, a Marquette University Law School professor who teaches business bankruptcy, agreed that conflicts may arise. Law firms may not want "to be in a position of reviewing their own work," he said. Having another firm serve as the chief bankruptcy counsel, he said, is "an appropriate exercise of caution to make sure we have everything independent and above board." Another corporate bankruptcy scholar, Jonathan Lipson of the University of Wisconsin Law School, said in an e-mail that a company's main law firm may well take the lead role in a reorganization, with other attorneys handling any matters where a conflict arises. "Here, in a sense, you see the opposite of that: The historic counsel is being retained as special counsel, and an outside firm is retained as bankruptcy counsel," he said.
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