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Category: Hourly Rates / Hourly Billing

Hourly Rate Data Can Be Sealed in Army Case in Federal Claims Court

September 30, 2019

A recent Law 360 story by Daniel Wilson, “Law Firm Rates Can Be Sealed in Claims Court Army Dispute,” reports that a property owner can file under seal a comparison of law firm billing rates meant to help determine its attorney fees after winning a takings claim against the Army, as that comparison is a commercial document not based on public data, the Court of Federal Claims ruled.  A compilation of law firm billing rates by Thomson Reuters and put forward by Waverley View Investors LLC is not based on publicly available data and is protected by a contractual confidentiality clause, and therefore can be considered confidential commercial information, Judge Charles F. Lettow ruled.

"The issue in this dispute is a close one because the public's right to access to court records is strong," Judge Lettow said.  "Nonetheless, the court finds that the Thomson Reuters compilation to be provided by Waverley in connection with the present claim for attorneys fees constitutes proprietary and confidential commercial information that is deserving of protection under [the rules of the claims court]."

Waverley, which owns land in Frederick, Maryland, won a constitutional takings claim against the Army in January 2018 after the Army — looking for contamination stemming from Fort Detrick, an Army installation that borders Waverley's land — left a gravel access road and groundwater contamination monitoring wells on Waverley's land following the expiry of a right-of-entry agreement.  The landowner was awarded damages of about $56,500 in March that year.  Waverley asked for attorney fees last month after the Federal Circuit affirmed the claims court's original decision in May.

As part of that request, the landowner asked to file a document compiled by media and commercial data firm Thomson Reuters, a chart reflecting the billing rates of its counsel, Crowell & Moring LLP, and five other peer firms in the Washington, D.C., market — Akin Gump Akin Strauss Hauer & Feld LLP, Arent Fox LLP, Arnold & Porter, Pillsbury Winthrop Shaw Pittman LLP and Steptoe & Johnson LLP.

It urged the court to allow it to file that billing rate compilation under seal as confidential commercial information, but the government pushed back, arguing billable rate comparisons aren't protectable as either confidential business information or trade secrets.  The disputed rate compilation is based on law firms' own data, self-reported to Thomson Reuters, and "is available for purchase by anyone willing to pay the price — including competitor law firms," the government said.

The government noted the claims court had previously rejected an effort by the plaintiff in another case to file a billing rate document under seal, as those rates — self-reported by the relevant law firms to the National Law Journal and to professional services firm PricewaterhouseCoopers — were "easily obtained from public sources" and wouldn't result in any harm to the relevant law firms.

But the document Waverley wanted to file under seal was different, the landowner said.  Only law firms that want to participate in, and pay for, the Thomson Reuters platform — providing access to their own financial data to gain access to other law firms' data — can access that data, it noted.  And it is "unvarnished" data collected directly from law firms' billing systems, unlike the self-reported data law firms provide to the media, according to Waverley.

The nature of that nonpublic data, as well as the related contractual pledge of confidentiality that participants in the system must agree to, are key differences compared to that earlier case involving publicly available billing data, and therefore Waverley had met its burden to justify a protective order, Judge Lettow said.

Survey: Hourly Rates Higher at Nation’s Largest Law Firms

September 26, 2019

A recent Law 360 story by Aebra Coe, “Larger Law Firms are Pulling Away From the Pack on Rates,” reports that partners at large law firms have traditionally charged more for their services than those at smaller firms, but new data released show the rate gap between the biggest firms and the rest of the industry has widened dramatically in recent years.

Average partner rates at law firms with more than 750 attorneys cost $575 per hour during the 12 months ending April 30, according to the LexisNexis CounselLink Trends Report 2019 released.  That’s 53% higher than rates at law firms with between 501 and 750 lawyers.  In 2017, that gap was 45% and in 2016 it was 40%, CounselLink found.

“There’s always been a significant gap between those largest law firms and the next tier,” said Kris Satkunas, CounselLink director of strategic consulting.  “The trend has been there, but I think this was the biggest leap I’ve seen in that change.”  The average partner rate among law firms with between 501 and 750 lawyers was $375 per hour, with the rate decreasing for each category of law firm smaller than that, down to $250 for law firms made up of 50 or fewer attorneys.

One likely factor impacting the ability of the largest firms to charge more, on average, for their partners’ time is the type of work they secure from clients, according to Satkunas.  The report found that the largest tier of law firms were responsible for 74% of mergers and acquisitions billed to clients during the 12 months ending April 30; 58% of finance, loans, and investment work; 55% of corporate, general and tax work; and 52% of regulatory and compliance work.

Those four categories of work demand higher rates than any other practice area or category, the report found.  The average M&A partner hourly rate was $706 per hour; while partners focusing on corporate, general, and tax work charged $608 an hour; regulatory and compliance partners charged $593 an hour; and finance, loan and investment partners charged $583 hourly.

Compare that to partners with insurance, general litigation, and real estate practices, whose average hourly rates were $200, $367, and $404 an hour, respectively.  “The fact is that firms will continue to raise their rates. It’s a reasonable business model,” Satkunas said.  “It’s just a question of how much and at what point do corporate counsel start pushing back on those increases?”

$3.4M Fee Request in $42M GM Oil Guzzling Settlement

September 25, 2019

A recent Law 360 story by Linda Chiem, “Attys Seek $3.4M in Fees From $42M GM Oil-Guzzling Deal,” reports that attorneys have asked a Florida federal judge to sign off on nearly $3.4 million in fees for their work negotiating an approximately $42 million deal with General Motors LLC to end consumers' proposed class claims that certain Chevrolet Equinox and GMC Terrain SUVs had defective oil-guzzling engines.

Plaintiffs' attorneys at Greg Coleman Law PC, Ahdoot & Wolfson PC and Whitfield Bryson & Mason LLP sought court approval for $3.39 million in attorney fees, $109,649 in litigation expenses and $4,500 apiece in service payments for each of the 12 named plaintiffs in three proposed class actions covered by the GM deal.  The attorneys said GM has already agreed to cover those costs, so they would not come out of the settlement pot, according to court documents.

The parties first told the court in April that they had reached a deal valued between $40 million and $45 million to end claims in the three suits alleging the 2.4-liter Ecotec engines in 2010-2013 Equinox and Terrain SUVs had defective piston rings that wore out too quickly and excessively guzzled oil.  In the filing, the plaintiffs' attorneys said the minimum value of the settlement is closer to $42.4 million, so their $3.39 million fees request works out to a "modest" 8% of the total settlement pot that's well within the parameters for "appropriate" fee awards in the Eleventh Circuit.

"Class counsel collectively devoted more than 3,200 attorney hours to the prosecution of this case," they said in their filing. "Accordingly, the amount of time and labor devoted to this case weighs in favor of finding class counsel's requested fee award reasonable."  The class counsel added: "The difficult and contingent nature of this case further demonstrates its undesirability.  There are few lawyers willing to invest significant time and resources prosecuting a lawsuit that involves complicated and uncertain legal questions and a substantial risk of receiving no compensation, which is evidenced by the fact that, to class counsel's knowledge, no other related class actions were filed elsewhere in the country."

Attorneys Earn $25M in Attorney Fees in JPMorgan 401K Settlement

September 24, 2019

A recent Law 360 story by Danielle Nichole Smith, “Workers’ Attys Get $25M in Fees From JPMorgan 401K Deal,” reports that a New York federal judge has given the final green light to a $75 million settlement resolving an Employee Retirement Income Security Act (ERISA) class action over JPMorgan Chase & Co.’s management of investments from participants in third-party 401(k) plans, signing off on the participants' bid for $25 million in attorney fees.

In his two orders, U.S. District Judge Vernon S. Broderick granted his final approval to the deal struck between JPMorgan and the class of third-party 401(k) plan participants and awarded the class counsel $25 million in attorney fees and nearly $1.5 million in costs.  The settlement was “fair, reasonable and adequate,” the judge found, dismissing with prejudice objections from three individuals.

Judge Broderick was also unpersuaded by two objections lodged against the attorney fees in the settlement.  The judge found one objection taking issue with certain costs being imposed on the class to be unavailing because courts weren’t allowed to “pick and choose the terms of the settlement they may desire to have modified.”

And another objection regarding the size of the award failed to take into account the 26,952 hours the firms spent working on the case, the judge said.  While the objector looked at the class counsel’s out-of-pocket costs to conclude that the $25 million represented a 1429% profit, the firms’ $17.6 million lodestar showed they only sought a “modest multiplier” of 1.4, the judge held.

The dispute stems from a proposed class action filed against JPMorgan and affiliates in April 2012 that received certification in March 2017.  In their case, the participants alleged that JPMorgan wrongly had its stable value funds invest heavily in funds that themselves were invested in “excessively risky, highly-leveraged assets.”

Class Counsel Seek $15M in Fees in $74M SunEdison Settlement

September 23, 2019

A recent Law 360 story by Mike Curley, “Attys Seek $15M in Fees From $74M SunEdison Settlement,” reports that the lead counsel in a class action claiming SunEdison Inc. misled shareholders about its financial health before filing for bankruptcy is asking a New York federal court to approve more than $15 million in attorney fees for its work in reaching a $74 million settlement with the company. 

In a memorandum filed, attorneys with Bernstein Litowitz Berger & Grossmann LLP, representing plaintiffs the Municipal Employees’ Retirement System of Michigan and Arkansas Teacher Retirement System, said the fee, which amounts to 21% of the $74 million pot, is reasonable and under the amount suggested by lodestar guidelines.

The request also includes $1.5 million in expenses, and 21% of any additional recovery, according to the memorandum.  The attorneys are also requesting an award of $13,598 to the Municipal Employees’ Retirement System of Michigan and $1,819 to Arkansas Teacher Retirement System for their costs and expenses.

The fees reflect that the settlement was achieved through the “skill, tenacity and effective advocacy” of the lead attorneys, according to the memorandum, including an extensive investigation into SunEdison’s alleged fraud, drafting the complaints, defeating motions for dismissal and summary judgment and nationwide and international discovery efforts.  In addition, the fee is based on a written agreement that lead counsel signed with the Municipal Employees’ Retirement System of Michigan at the start of the case and should therefore be presumed to be reasonable, the attorneys argued.

Circuit courts have approved attorney fees in settlements of this type of more than 30% of the total fund, according to the memorandum, which added that the lodestar payment, based on the amount of hours the attorneys put in, would be $18 million, making the $15 million request only 86% of the lead counsel’s time.

The 2015 class action alleges false and misleading statements and omissions in violation of the Exchange Act and liability and negligence claims under the Securities Act.  The suit is one of a multitude that SunEdison is facing in multidistrict litigation following business decisions that ultimately led to its filing for bankruptcy in April 2016.

In their bid for initial settlement approval filed in July, shareholders in the company also asked the court to allow their counsel to request attorney fees of up to 22% of the settlement fund and another $2 million in litigation expenses incurred over the three and a half years since the suit was filed.  Under the settlement, a $74 million fund will be divided between the two subclasses, with $19.5 million and any of the supplemental insurance money going to the Exchange Act subclass, and $54.5 million going to the Securities Act subclass, the investors said.