Attorneys' Fees in Class Actions

By John J. Park, Jr.
October 02, 2007
In 2005, as a member of a plaintiff class in a securities lawsuit, I objected to the attorneys’ fee component of a proposed settlement. Over my objection, the court approved a settlement that resulted in a class counsel’s recovery of a contingency fee of 25% (plus expenses) from a settlement fund of $80 million—a figure that represented a multiplier of 4.7 on the “lodestar” figure derived by multiplying the hours worked by the typical fee. Put differently, class counsel would have had to have worked far more hours at their regular billing rate to receive that amount in fees....