A recent Law 360 story by Chris Villani, “Judge Makes Schlichter Bogard $5M Fee Offer It Won’t Refuse” reports that Schlichter Bogard & Denton LLP and two other firms will receive nearly $5.25 million in fees after a federal judge during a hearing offered the attorneys representing Massachusetts Institute of Technology workers in an $18 million ERISA settlement a choice: take the deal or pay for a special master. The fee award is less than the $6 million Schlichter Bogard, Fair Work PC and the Law Offices of Michael M. Mulder sought for guiding the class to a settlement with MIT on the eve of trial last fall. But it's more than U.S. District Judge Nathaniel M. Gorton typically hands out in cases like these.
Judge Gorton had already rejected the firms' bid for a 33% cut. And he told them again that while he had no issue with the nuts and bolts of the settlement itself — including awarding the firms $522,000 in expenses and giving $25,000 each to four named plaintiffs — he does have a problem with the $6 million fee ask. "The custom of the courts is generally to award between 20 and 30% and the custom of this particular session is to award no more than 25%," Judge Gorton said, noting those numbers have held up even when the lawyers achieved certain "nonmonetary" benefits for the class, as was the case here.
"After careful consideration, I have decided to split the difference," Judge Gorton said, offering the firms 29%, or $5,249,000. He then made them an offer: They could either accept the 29% fee or pay for the appointment of a special master whose recommendation would guide Judge Gorton in the apportionment of fees, though the report would not be binding.
Speaking for the firms, Schlichter Bogard's Jerome Schlichter took the deal on the spot. "We will accept the court's ruling that the 29% fee will be what the court awards rather than go down the road of having a special master," Schlichter said. Prior to Judge Gorton's fee ultimatum, Schlichter touted the lawyers' success in achieving the largest settlement of its kind. Schlichter Bogard effectively pioneered class action suits against prominent universities over retirement plan fees. None of the cases his firm has filed has achieved a settlement of $18 million, and suits filed by other firms against Brown University and the University of Chicago were settled for $6 million and $3.5 million respectively, Schlichter said.