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$81M Fee Allocation Dispute in Tech Wage Action

July 30, 2015 | Posted in : Billing Practices, Billing Record / Entries, Fee Agreement, Fee Allocation / Fee Apportionment, Fee Award, Fee Dispute, Fee Dispute Litigation / ADR, Fee Expert / Member, Fee Reduction, Fee Request, Hourly Rates

A recent Wall Street Journal story, “Lawyers Squabble Over $81 Million in Fees for Tech Wage Suit,” reports that a four-year lawsuit over hiring practices in Silicon Valley has taken another unusual twist: a dispute between plaintiffs’ lawyers over dividing $81 million in proposed fees.  Joseph Saveri, one of the lead attorneys for 65,000 current and former tech workers, agreed to withdraw his fee request, which covered more than 2,000 hours of work and could have been worth more than $8 million.

Saveri acted after Kelly Dermody, his co-lead counsel and former law partner, questioned his submissions.  In a July 9 hearing before U.S. District Judge Lucy Koh, Dermodt said she had been “concerned about the time-keeping at Saveri’s firm “throughout the case, according to a transcript.  Dermody said Saveri had been habitually late filing time sheets.

Koh in March gave preliminary approval to a $415 million settlement in the case, in which the workers accused Apple, Google, Intel and Adobe of conspiring not to recruit each other’s workers, thus suppressing wages.  The settlement included $81 million in legal fees for four firms that represented the workers.

To divide the fee, the firms had to submit time sheets and billing records.  The fee was to be divided proportionate to each firm’s bill.  In his submission, Saveri billed his own time at $950 an hour, for a total of more than $2 million.  Under the formula for dividing the fee, that could have been worth more than $8 million.  Dermody billed her time at $800 an hour.

NALFA member and legal fee expert Bruce Meckler of Cozen O’Connor in Chicago said Saveri’s submissions deserve scrutiny.  “I certainly would question those time entries,” he said.  “It looks like the court made the right move” by requiring Saveri and Dermody to meet to resolve the fee dispute.

Saveri and Dermody agreed after the July 9 hearing to throw out all of Saveri’s 2,145 billed hours.  In the filing, Saveri’s firm cut a total of 2,765 hours from its fee request.  Even without those hours, the firm stands to recover more than $15 million in fees.