What’s a contract attorney really worth after the recession? That question is at the heart of a dispute over legal fees in the $590 million settlement of a securities class action against Citigroup Inc. in U.S. district court in Manhattan.
In a fee request filed on December 7, plaintiffs’ counsel at Kirby McInerney valued some of the work done by the outside attorneys that it hired for discovery at $1,000 per hour. Ted Frank—founder of the Center for Class Action Fairness and, as a Citigroup shareholder, a member of the class—filed an objection on December 27, arguing that the rates for the outside attorneys should be around $25-$40 per hour. On January 18, Kirby McInerney filed a response in which it defended the fee request, but didn’t disclose what the outside lawyers were actually paid. Judge Sidney Stein will hold a fairness hearing on the fee request on April 8. The dispute was first reported by Daniel Fisher at Forbes, who has covered it here and here.
New York-based Kirby McInerney is the lead firm for the plaintiffs’ legal team, which also includes Motley Rice and Glancy Binkow. The suit, which was filed in 2008, accused Citi of misleading investors about the risk of its derivatives business. The company agreed to settle in August 2012.
Kirby McInerney, as lead counsel, filed the fee request for all of the plaintiffs attorneys, which seeks $100 million for 87,000 hours of professional time. The plaintiffs’ lawyers calculated that amount by using a lodestar multiplier of 1.89 to account for the time spent on the case and the risk that they assumed by filing the initial lawsuit.