Forbes mentions Ted Frank's objections to the marked up fee requests from lawyers who worked on the Citigroup class action lawsuit.
Class-action activist Ted Frank has filed an objection to the proposed fee, however, saying the markups on contract attorneys are excessive given experience levels of many of the lawyers involved. One large corporation pays a flat $50 an hour for the sort of document review the plaintiff lawyers performed in the Citigroup case, Frank said in his filing.
Plaintiff lawyers often criticize the lodestar method, saying a simple percentage fee does a better job of aligning their interests with those of the plaintiffs. But many courts requre the lodestar as a cross-check to make sure the fee is commensurate with the work done on the case.
Shareholders not only pay most of the cost of the settlement (insurance covers some of it, but investors pay the insurance premiums, too), but they must pay the legal fees as well. So every dollar that flows out of the settlement into the hands of the lawyers is a dollar the shareholders have given up forever.
Read the full article at Forbes.