Daniel Fisher continues his investigative reporting into the Citigroup class counsel contract-attorney scandal, where class counsel claimed in a fee request that temporary attorneys they were paying $32/hour for were really $550/hour attorneys associated with their firm. Earlier: January 7 and January 2. Fisher notes:
Kirby McInerney flatly denied Frank's allegation that the temp attorneys were doing "purely clerical 'objective coding' work that need not be performed by an attorney." None of the lawyers did such coding, the firm said, because the documents were already coded when they arrived. Instead, attorneys "were entrusted with the same high-level, high-complexity, high-importance work performed by Kirby McInerney personnel at both partner and associate levels."
Examined more closely, however, much of that work appears to be not much better. The lawyers scanned documents for key words and phrases that might indicate Citi executives knew about the deteriorating condition of the bank's CDO portfolio and hid that from shareholders. They were aided by a "coding sheet" and a "drop-down" list of CDOs lawyers wanted them to look for.
Kirby McInerney's description of the work also disgrees with the impressions of at least one attorney on the case who spoke to me on condition of anonymity.
"It is technically legal work," this person told me, such as identifying documents that might demonstrate scienter, or guilty knowledge. "Can a paralegal do it? Yes. Do they do it? Yes."
More importantly, even if they hire J.D.s to do this work on the defense side, law firms generally can't get away with marking up their work to $500 an hour.
One press-coverage mystery: this was one of the most widely read stories on the ABA Journal this month. Why isn't Above the Law taking advantage of the comment bait and doing its own investigation?