A recent Law 360 story by Hailey Konnath, “Attys Score $53M in $240M Wells Fargo Fake Account Deal,” reports that Lieff Cabraser and Saxena White attorneys representing Wells Fargo & Co. investors in their derivative suit over fake accounts will come away with $52.8 million in fees, a 22% cut of the $240 million settlement they negotiated last year, according to an order in California federal court.

The deal, which was pitched as the largest ever insurer-funded cash settlement of a derivative action, settles allegations that former Wells Fargo CEO John Stumpf and 19 other executives were at fault for the 1.5 million unauthorized customer accounts created by employees to help meet aggressive sales goals.  Under the agreement, the bank will also implement a series of corporate governance reforms, executive compensation cuts and clawbacks undertaken by the bank — changes that add an additional $80 million in value to the total settlement value, according to the investors.

In a motion filed last summer, the co-lead counsel for the investors requested $68 million in attorney fees, which represents 21.25% of the combined $320 million value of the agreement.

U.S. District Judge Jon S. Tigar gave his final blessing to the settlement but awarded the attorneys a lower amount, ruling that the value of Wells Fargo's measures can't be included in calculating the attorney fees.  While those corporate changes are important, the benefits aren't easily quantifiable or clearly attributable to the efforts of the co-lead counsel, Judge Tigar said.

"The value conferred to Wells Fargo's shareholders by the corporate governance reforms is not sufficiently quantifiable to be directly included in the common fund," the judge said.  On top of that, the co-lead counsel didn't provide a method for determining its percentage of the fund, Judge Tigar said.

However, the judge said he agrees the settlement "represents an excellent result for the shareholders" and that the risk taken by counsel weighs in favor of a substantial award.  Judge Tigar reduced the requested lodestar by $2.8 million to a total of $19.6 million, landing at the $52.8 million award.  Co-lead investor plaintiffs the Fire & Police Pension Association of Colorado and the City of Birmingham Retirement and Relief System will also get $25,000 incentive awards, to come out of the attorney fee award, according to the order.