Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  



Citigroup Securities update

| No Comments

You may recall my objection to the $100M fee request in the Citigroup Securities case. (Jan. 2; Jan. 7; Jan. 25.)

On February 28, the district court granted in part and denied in part my request for discovery, and ordered the production of the contract attorneys' timesheets and resumes; this generated some not-quite-accurate press coverage from reporters who didn't read the order. Contrary to what the ABA Journal and NALFA said, the plaintiffs' attorneys were allowed to hide what they paid the contract attorneys, what the contracts with the vendors said, and were able to shield everyone—including expert witnesses, contract attorneys, and witnesses submitting declarations—from deposition. [Reuters; Law360]

The discovery was telling. Only two of the contract attorneys were doing substantive work; most of the others had no relevant legal experience, and were billed the same for their time since graduation whether their "experience" involved being unemployed for years because of failure to pass the bar or work at securities litigation forms. (One, being billed at $425/hour, was clearly supervising the so-called experienced "$550/hour" contract attorneys.") The overwhelming majority of contract-attorney time was billed without any contemporaneous description of work: the attorneys hand-wrote the daily hours on the job, and nothing else. The ones who did write descriptions were doing such menial tasks as coding and deposition summaries, and inefficiently at that—one attorney billed 239 hours and over $90,000 to summarize a one-day deposition transcript of under 400 pages. And an extraordinary 30% of the contract-attorneys' lodestar was billed after the case settled—about twenty attorneys didn't even start work on the case until after settlement, and that work didn't change the value of the settlement one iota. I filed a supplemental objection on March 15. We've also moved to strike the expert reports that assert a 16.5% fee is commonplace for a settlement of this size. The actual figure is substantially smaller than that.

Meanwhile, on March 15, the Association of Corporate Counsel submitted an amicus letter brief, noting that the vast majority of corporate counsel pay cost for contract attorneys, and do not tolerate $550/hour markup rates for such low-level work in this legal economy.

Coverage: Fisher @ Forbes; Reuters; ACEDS; Toothman (whom I hired as an expert witness after that blog post); Law360 ($); Law360 ($). In that last story, note how Joanne Doroshow dishonestly misrepresents the question in dispute rather than fairly addresses the actual argument that I make: that lodestar reflects prevailing market rates, and the prevailing market rate for contract attorneys is not $550/hour, much less greater than $1000/hour after a multiplier.

Leave a comment

Once submitted, the comment will first be reviewed by our editors and is not guaranteed to be published. Point of Law editors reserve the right to edit, delete, move, or mark as spam any and all comments. They also have the right to block access to any one or group from commenting or from the entire blog. A comment which does not add to the conversation, runs of on an inappropriate tangent, or kills the conversation may be edited, moved, or deleted.

The views and opinions of those providing comments are those of the author of the comment alone, and even if allowed onto the site do not reflect the opinions of Point of Law bloggers or the Manhattan Institute for Policy Research or any employee thereof. Comments submitted to Point of Law are the sole responsibility of their authors, and the author will take full responsibility for the comment, including any asserted liability for defamation or any other cause of action, and neither the Manhattan Institute nor its insurance carriers will assume responsibility for the comment merely because the Institute has provided the forum for its posting.

Related Entries:



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.