Forbes reports on Center for Class Action Fairness' In re Citigroup Inc. Securities Litigation case.
A federal judge approved a $590 million settlement of a securities class action against Citigroup C +0.00%, but only after slashing the fees plaintiff lawyers were seeking by 27%, citing “waste and inefficiency” and “significantly inflated” hourly rates.
The order by U.S. District Judge Sidney Stein in New York cut the fee award to Kirby McInerney by $26.7 million to $70.8 million. The law firm’s request for nearly $100 million in fees drew a spirited objection from attorney Ted Frank of the Center for Class Action Fairness, who accused Kirby McInerney of padding its bill by trying to mark up thousands of hours of work by inexpensive contract attorneys at rates of more than $400 an hour.
The judge ultimately cut the fees he’d consider under the “lodestar” for calculating the total award to $200 an hour. That’s still a hefty markup from the $32 an hour I have been told most of the lawyers were actually paid by temp agencies such as Hudson Legal. In all, Kirby sought $28.6 million for the work of contract lawyers, compared with $17 million for all other attorneys.