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Category: Litigation Economics

Study: Washington, DC Outpaces Peer Cities on Hourly Rate Growth

February 15, 2024

A recent Law.com story by Abigail Adcox “ ‘D.C. Was Our Best-Performing Region’: Billing Rate Increases and Demand Growth Drive Strong Year in the Beltway”, reports that law firms based in Washington, D.C., finished out 2023 with a strong financial performance, propelled by billing rate increases, expense control and robust demand within regulatory and litigation practices, according to results from a bank survey.

Among D.C.-based firms, gross revenue was up 7.6% in 2023 over the previous year, higher than the industry average of 6%, as the average billing rates in the region rose 8.8% compared with the industry average of 8.3%, according to Wells Fargo’s Legal Specialty Group’s year-end survey results.  Those results included eight firms headquartered in the D.C. region.

“D.C. was our best-performing region,” said Owen Burman, senior consultant and managing director with the Wells Fargo Legal Specialty Group.  “When talking to firms to really find out what drove it, the regulatory side was on fire for so many firms. And litigation overall has been supporting many firms this past year.”  In average revenue growth, D.C. firms exceeded peers in New York City (7%), California (6.6%), Texas (6.3%), Florida (5.9%), Chicago (5.2%), Philadelphia (4.7%) and Atlanta (4.4%), according to Wells Fargo data.

“The practice mix was very much in favor of D.C.-headquartered firms” in 2023, Burman said, citing robust demand within restructuring, antitrust and litigation practices, as other firms saw the impact of slowdowns in the transactional market.  It follows a lackluster 2022 for D.C. firms, which “underperformed,” as anticipated enforcement activities under the Biden administration didn’t come to fruition as expected, according to Burman.

However, in 2023, as demand picked up within regulatory and litigation practices, D.C. firms were able to control expenses and were less aggressive in hiring, contributing to their revenue growth.  Profits per equity partner were up 10.7%, compared with the industry average of 4.9%.  The number of full-time equivalent lawyers at D.C. firms also grew by 2%, slightly below the industry average of 2.8%. However, productivity at D.C. firms was down 1%, still better than the industry average (down 2.1%).

Demand among all lawyers was also slightly better at D.C. firms (0.9%) than the industry average (0.7%), but fell short of peers in New York City, which saw a 2% increase in demand.

Controlling Expenses

Meanwhile, total expenses grew 4.1%, the best out of all eight regions tracked, and above the industry average of 6%.  “They were able to control the expense growth much better than peers,” Burman said.  “Last year they were able to control the lawyer compensation pressures a bit more than other markets.”

Billing rate increases were in large part able to compensate for increases in lawyer compensation at D.C. firms last year.  “All together the rate increases are covering it.  The problem is that they were hoping it would cover other investments and now they have to redirect that money into supporting the lawyer compensation,” said Burman, adding that artificial intelligence and innovation investments are other top priorities for firm expenses.

Because of these expenses and other priorities, in 2024, D.C.-based firms may see more expense pressure, and they may be more in line with the industry averages in expense growth, he said.  Still, entering the year, D.C. firms are “optimistic,” Burman added, expecting strong demand within litigation and regulatory practices to continue.  “Their growth estimates are quite optimistic,” Burman said.  “Litigation, restructuring practices are still quite strong.  So those haven’t tailed off as we’re anticipating this rebound in transactions.”

Article: How Plaintiffs’ Counsel Can Avoid Common Benefit Fund Fee Disputes

December 14, 2023

A recent article by Judge Marina Corodemus and Mark Eveland, “Four Ways Plaintiffs’ Firm Can Prevent Common Benefit Fund Fee Disputes”, reports on ways plaintiffs’ firms can prevent common benefit fund fee disputes.  This article was posted with permission.  The article reads:

Common benefit funds (CBFs) ensure fairness and equity in the distribution of legal fees and expenses in aggregate and complex litigation, including class actions, mass torts, trust and securities, and multidistrict litigations (MDLs), where the litigation is prosecuted by either an ad hoc or judicially appointed committee or team of attorneys.  Their primary purpose is to recognize and compensate the plaintiffs’ attorneys who contribute their time, expertise, and resources to advancing the interests of most, if not all, of the plaintiffs in a particular litigation, including litigants who are not their clients but are benefited by the attorneys’ work product prosecuting the suit.

CBFs provide a compensation mechanism that enables large scale, highly expensive complex class actions and mass torts to proceed.  They provide the financial incentive for plaintiffs’ attorney groups to organize and then collect and centralize financial contributions and disbursements necessary to fund critical litigation activities like document management and reviews, scientific or factual investigations, expert recruitment, and, where needed, retention of specialized legal experts (such as bankruptcy, tax, and transactional practitioners).  CBFs help ensure that no single attorney or firm shoulders the entire financial burden of the legal work that puts the plaintiffs in complex litigation in position to resolve the litigation favorably.  When appropriately managed, CBFs reward attorneys and firms for doing work that benefits the greater good.

Certainly, attorneys who take on the risks and leadership roles in complex litigation deserve fair compensation for their efforts.  But lately, there seems to be a larger number of disputes over disbursements from CBFs among the plaintiffs’ firms involved in complex litigation (so called “Common Benefit Attorneys”) when and where such disbursements are forthcoming.  These disputes often garner public attention, perpetuating a narrative that plaintiffs’ attorneys are motivated solely by greed and self-interest.  Certain defense firms whose clientele often are mass tort defendants and advocacy organizations—the entities most responsible for creating this narrative in the first place—are happy to use those disputes as part of their public relations efforts supporting “tort reform.”

The pelvic mesh MDL, established in 2010 and which involved over 100,000 female plaintiffs suing seven companies in what is undoubtedly one of the most complicated MDLs in history because it is a series of seven MDLs (MDL nos. 2187, 2325, 2326, 2327, 2387, 2440 and 2511) consolidated in the U.S. District Court for the Southern District of West Virginia, is an example of how a highly publicized CBF dispute can cast a shadow on the legal profession.  That dispute, like so many other CBF disputes, centered on whether certain law firms deserved the allotted fees from the CBF that the members of the plaintiffs’ executive committee in that litigation allocated to them.

And, just this past August, the Ninth Circuit settled a dispute—for now—in the Bard IVC filters litigation, In Re Bard IVC Filters Products Liability Litigation, MDL No. 2641 (D. Ariz.), established in 2015, regarding whether plaintiffs’ attorneys who agree to contribute to common benefit funds in MDLs are bound by those deals if they settle cases that were not part of an MDL.

In our view, there are four principal causes of CBF disputes.  We list them below, along with strategies for preventing them.

1.  A lack of billing standards and concurrent billing and time/expense review can be readily avoided through precise case management orders (CMOs) and clear billing guidelines.

Many CBF disputes are caused by the absence of well-defined requirements and standards for billing common benefit time and expenses.  Ambiguity surrounding billing practices leads to inconsistencies in the way attorneys record and submit their costs, giving rise to misunderstandings and disputes when fees are allocated.  Additionally, the lack of a standardized framework and mechanics for billing and expenses complicates attorneys’ perceptions of the fairness and validity of fee requests, in turn potentially eroding trust among plaintiffs’ firms.  Without clear and precise billing standards in place, and an evenhanded administration of those standards, it becomes challenging to objectively gauge the contributions of each attorney and firm.

Implementing comprehensive case management orders (CMOs) and clear billing guidelines can prevent CBF disputes.  CMOs should not only specify the tasks that qualify for compensation but also the allowable rates and expenses.  In doing so, they will provide an independent standard to reference when disputes arise.

For instance, a standardized CMO might include a provision stating that research tasks directly related to the case, such as reviewing medical records or consulting with expert witnesses, are billable, while unrelated tasks, like administrative work, are not.  (Of course, in highly complicated cases requiring extensive coordination and collaboration, administrative work may certainly be deemed permitted billable time.)  In addition, it is well established that there is a hierarchy of value for work that has a greater impact on the litigation and generates more “common benefit.”  Such work deserves greater compensation.  A CMO and related agreements can specify this hierarchy, providing guidelines for determining what kind of work generates a common benefit, and calculating the fees to be paid for this work.

CMOs and agreements as to billing guidelines are binding and provide clarity needed during fee allocation in MDL cases, potentially preventing major fee disputes.

For example, the CBF dispute in the pelvic mesh litigation arose in part because of a disagreement over what work provided more of a common benefit: the settlement of cases quickly and for relatively small dollar amounts or high-dollar jury verdicts.  Ultimately, Judge Joseph R. Goodwin of the Southern District of West Virginia granted a request from a fee and cost committee in that litigation that deemed the former to provide more common benefit than the latter.

The Bard IVC filters litigation provides another useful illustrative case.  There, some plaintiffs’ attorneys moved to reduce and exempt their clients’ recoveries from common benefit and expense assessments, arguing that no assessment should be paid by clients whose cases were filed in federal court after the MDL closed, were filed in state court, or were never filed in any court. U.S. District Judge David G. Campbell of the District of Arizona denied this motion.  As we noted above, the Ninth Circuit affirmed Campbell’s ruling, holding that these attorneys, who had agreed to pay a share of their fees to the MDL leaders, were required to abide by those agreements even if they settled cases outside of the consolidated proceeding.

Agreed-upon CMOs that set forth procedures, guidelines, and limitations for submitting applications for reimbursement of litigation fees and expenses inuring to the claimants’ common benefit can be instrumental in resolving or avoiding CBF disputes.

2.  The problems caused by late submissions of billing records can be avoided by requiring attorneys to make regular, contemporaneous submissions.

Another frequent cause of CBF disputes is attorneys delaying their submission of billing records.  Too often, attorneys and their support teams, engrossed in all-consuming complex litigation, fail to timely submit their time and expense records.  Attorneys sometimes submit crucial billing details months or even years after the fact, making it necessary for others to “forensically” reconstruct this information, a practice that not only jeopardizes the accuracy of time and expense submissions but may result in crucial work being overlooked or submitted without adequate supporting documentation. 

Delayed submissions also prevent courts and plaintiffs’ leadership teams from performing comprehensive and accurate assessments of work described in billing submissions.

CMOs or fee committees that mandate the regular submission of time and expense records can put an end to this problem.  As was the case in the pelvic mesh MDL, adopting CMOs that include specific provisions requiring attorneys to submit their time and expense records at regular intervals throughout a litigation significantly enhances efficiency and transparency.  These CMOs may, for instance, stipulate that detailed records must be submitted monthly or quarterly, with a reduction in potential compensation for any submissions beyond agreed-upon deadlines. 

This practice ensures that time and expense records are submitted relatively promptly after attorneys perform the work described in them, capturing the most accurate information (and fresh memories).  The regular submission of records also enables the court and MDL leadership to compare billing records with case calendars to determine if the work completed and the time spent completing it is consistent with expectations of when that work should have been completed and how long it should have taken.

3.  The lack of independent oversight can be remedied by bringing on a neutral.

When plaintiffs’ leadership teams collect, review, and approve CBF allocations, and stand to benefit personally from those decisions, it is easy to see how this lack of independent oversight can cause CBF disputes and give rise to accusations of conflicts of interest and self-dealing.  Appointing a neutral third party to oversee time and expense submissions to the CBF and mediate disputes can remedy this problem. 

This impartial overseer should be an independent legal expert or mediator with no vested interest in the litigation outcome, which should preclude accusations of conflicts of interest and self-dealing.  This neutral party should also be empowered to enforce deadlines for submissions, review and evaluate the reasonableness of time and expenses submissions, disallow submissions containing excessive time and expenses, and swiftly address any discrepancies that arise during the allocation process.

Some attorneys and judges are satisfied with handing off the issues at the center of a CBF dispute to an accountant.  We would suggest that the calculations necessary to resolve such a dispute require more than a bookkeeping background.  We believe hiring a neutral who is experienced in mass torts litigation and awarding attorneys’ fees, and who recognizes the worth of litigation roles, is a superior selection method.

4.  Disputes caused by an opaque process could be reduced by making it more transparent.

Inadequate transparency is a major cause of CBF disputes.  Those attorneys and firms that are not in leadership positions often have limited knowledge of the fees and expenses incurred as the litigation progresses, which could make them feel blindsided when their allocated fees are less than those they submitted.  Without ongoing and timely communication regarding billing submissions and allocations, attorneys and firms outside the leadership circle may question the fairness and reasonableness of both.

The solution to this problem is simple.  Leadership committees in complex litigation should provide all law firms that pay assessments into the CBF with regular reports that explain time and expense submissions.  In addition, every firm could ask questions of the people responsible for submitting those bills and allocating distributions from a CBF.

Attorneys whose inquiries are addressed by leadership and a court-appointed neutral throughout the process are far less likely to contest fee allocations at the conclusion.  Plus, increased transparency enhances confidence among plaintiffs’ firms, fostering greater trust and a more cooperative environment.

Simple solutions to a complex problem?

Given the time plaintiffs’ attorneys spend litigating complex litigation, it is not surprising that they want to ensure they are paid for the work they did that went to the common benefit of the plaintiffs in a litigation.  But given the number of attorneys and firms representing clients in these litigations, and the sizes of CBFs in complex litigation today—the CBF in the Vioxx litigation, In re Vioxx Products Liability Litigation, MDL No. 1657 (E.D. La.), established in 2005, was $315 million—disputes over whether those attorneys’ contributions are fairly reflected in their CBF allocation are practically inevitable.

In our view, the core four causes of CBF disputes can be reduced in frequency and severity, if not outright eliminated, by implementing standardized billing practices, promoting timely billing submissions, and instituting impartial oversight and increasing transparency concerning the CBF allocation process.

Unless plaintiffs’ attorneys can eliminate CBF disputes, the positive social change they can bring about through complex litigation will be overshadowed by what the public—thanks in part to the corporate defense bar and advocacy organizations—will perceive as greedy attorneys bickering over millions of dollars.  That, in and of itself, should motivate more plaintiffs’ leadership teams to adopt these methods for reducing CBF disputes.

Judge Marina Corodemus is a former New Jersey Superior Court judge who helped establish New Jersey Mass Torts court (MCL).  She is now the managing partner of the ADR practice at Corodemus & Corodemus.  She has served as a special master in numerous MDLs and complex litigation in federal and state courts.  Mark Eveland is the CEO of Verus, a leading mass tort litigation support services firm.

Study: Corporate Legal Departments Return to Hourly Billing?

November 13, 2023

A recent Law.com story by Hugo Guzman, “By-the-Hour Billing Torments Legal Departments. So Why Aren’t More Demanding Alternatives”, reports that legal consultants and pricing experts for years have advised legal departments frustrated with ever-rising outside counsel fees to unshackle themselves from paying hourly rates and instead negotiate alternative fee arrangements.  The benefits can be substantial, the experts say.  For example, paying a law firm a set amount for handling a matter or making some fees contingent on a successful outcome, can give legal departments cost transparency and predictability.

In short, the various arrangements help establish a link between outside counsel costs and the value provided.  Yet adoption of alternative-fee arrangements remains sluggish—even as outrage over outside counsel hourly rate increases grows.  As Andrew Woods, general counsel of the advertising software firm PubMatic told Law.com last week, “In the long run, continued increases in hourly rates are growing far faster than our outside counsel budgets and are just not sustainable for clients to bear.”

But studies find that companies typically look elsewhere for financial relief, such as by bringing more work in house, instead of pursuing AFAs.  Indeed, a study released last month by the Association of Corporate Counsel and the litigation platform Everlaw found widespread in-house frustration over outside counsel cost predictability—with just 38% of the 373 U.S. in-house legal professionals surveyed saying they were “somewhat satisfied” or “extremely satisfied.”

Even so, AFAs were deep down their list of potential solutions.  Sixty-six percent of respondents said they plan to bring more work in house as a cost-control strategy, while 39% plan to shift work from big law firms to smaller ones, and 33% plan to leverage the use of technology and AI.  Expanding AFAs ranked fourth, at 28%.  That reluctance shows up in numerous analyses of legal industry spending.  For example, a yet-to-be published study by ALM Legal Intelligence found that 16% of Am Law 200 revenue came from AFAs in 2023—an increase of just 2 percentage points since 2019.

Ken Callander—who stepped down as legal-ops chief at Uber in 2016 to start a consulting firm that champions AFAs—said many in-house attorneys aren’t well-versed on alternative approaches and even those who are often have a cultural aversion to them.  “Billable hours is all they know,” said Callander, managing principal of Value Strategies.  “To move toward something other than that, it’s really foreign to them.”

In addition, the straightforward nature of hourly rates is inherently appealing to legal departments and allows for easy comparisons between firms, said Gretta Rusanow, managing director and head of advisory services at Law Firm Group for Citi Global Wealth at Work.  AFA proposals, in contrast, can be challenging to compare, Rusanow said.  She said AFA discussions between legal departments and law firms often evolve into negotiations for steep discounts on hourly rates.  Citi’s data on outside counsel showed that roughly 21% of firm revenue in 2022 was derived through AFAs, we typically see around 45% of revenue coming from pre-negotiated discounts, Rusanow said.

‘Good AFAs and Bad AFAs’

Aarash Darroodi, general counsel of the guitar-maker Fender, said that his company was drawn to the allure of AFAs and tried them but was unsatisfied.  The problem, he said, was that law firm attorneys felt as though they weren’t being sufficiently compensated for their work and thus did less instead of more, as an attorney paid by the hour would be incentivized to do.

The result was that Fender’s in-house team found itself burdened with trying to keep up with the global regulatory climate, he said, a task it doesn’t have time to handle and for which a law firm is better suited.  “You can pay an hourly rate, or you can pay on an alternative fee structure,” Darroodi said.  But if you’re not getting adequate legal service, it doesn’t really matter.”

Fender’s experience underscores the complexity of negotiating AFA agreements, legal observers say.  “There are good AFAs and bad AFAs,” said Jason Winmill, managing partner of the legal department consulting firm Argopoint.  In addition, AFA arrangements require more legal oversight and management than traditional, hourly arrangements, he said.  Those realities make them more attractive for large companies than smaller ones, where resources often are stretched, consultants say.

Indeed, the ACC/Everlaw study found that, while only 28% of respondents overall were expanding AFA use as a cost-control strategy, 58% of those from large companies (at least $10 billion in revenue) were doing so.

‘People Don’t Think It’s Broken’

Often, law firms share their clients’ aversion to AFAs, said Ken Crutchfield, vice president and general manager of legal markets for Wolters Kluwer Legal & Regulatory.  He said it can be hard to persuade law firms to ditch profitable practices for something untested.

“[Billable hours] align with law firm risk profiles,” Crutchfield said. “Because of law firms’ hourly based approach, and especially when they take earnings at the end of the year, you can operate at higher margins and have more predictable services.”

Susan Hackett, founder of consulting firm Legal Executive Leadership, agreed.  She said law firm partners are understandably leery of moving away from an hourly billing model that has propelled legions of attorneys to wealth and success.  She said she believes AFAs have the potential to make law firms even more profitable, based on detailed analyses she’s done for her legal department clients.

But the problem is that law firms aren’t in a position to do those kinds of analyses, because every clients’ needs are different, Hackett said.  Which leads many to stick with what they know—the hourly rate model, especially if their clients aren’t pressuring them for something different.  “We don’t have a lot of experience with, or very good understanding of what the alternative fee mechanisms might be,” Hackett said. “[And] we’re doing very well on the current system.  People don’t think it’s broken, and they don’t want to fix it.”

$267M Attorney Fee Award Appealed in $1B Dell Settlement

October 2, 2023

A recent Law 360 story by Jeff Montgomery, “Pentwater Appeals $267M Atty Fee Award in Dell Case in Del.”, reports that a private equity investor in Dell Technologies Inc. is appealing a Chancery Court's record $266.7 million fee award to class counsel that secured a $1 billion settlement for stockholders who sued over a $23.9 billion stock swap in 2018.  Pentwater Capital Management filed notice of appeal without a transcript late Friday with the Delaware Supreme Court, challenging both the attorney fee award and a $50,000 incentive award granted to Steamfitters Local 449 Pension Plan, the lead plaintiff for the suit filed in November 2018.

Vice Chancellor J. Travis Laster set the fee at $266.7 million on July 31, trimming a request of $285 million.  He said in his July 31 decision and order that eight funds that had invested in Dell but were not part of the class suit, recommended a lower fee, citing concerns about "windfall" profits in the case of large awards.

Pentwater — holder of 1.6% of the Dell Class V tracking stock at issue in the Chancery Court suit — branded the fee award as massive and a potentially "dangerous" precedent. In a Chancery Court brief opposing the fee, Pentwater argued that "the requested fee in absolute and percentage terms is disproportionate to the value conferred on class members."

Settlement of the overall case prevented a trial on claims targeting Dell's effort to exchange Class V stock — created to finance much of Dell's $67 billion acquisition of EMC Technologies in 2016 — for shares of Dell common stock.  The Class V shares generally traded at only 60% or 65% of the price of VMware, a business in which EMC owned an 81.9% equity stake when Dell acquired EMC.  Public shareholders, the class had argued, were shortchanged by $10.7 billion when, in December 2018, Dell Technologies paid $14 billion in cash and issued 149,387,617 shares of its Class C common stock for the Class V shares.

When the challenged conversion closed on Dec. 28, 2018, VMware stock closed at $158.38 per share, and Class V stockholders received just $104.27 per share, fueling objections that the Dell Class C stock to be received for Class V shares had been overvalued.

In his fee opinion, the vice chancellor noted that class attorneys provided hundreds of examples of contingent fee agreements to support their original request for $285 million.  However, he noted, none of the objectors provided examples, except for Pentwater, and that example was "not for a Delaware case."  Vice Chancellor Laster also observed in his July 31 decision that investment funds that had recommended a lower amount, including Pentwater and seven others, had "a strong economic motivation for seeking a lower fee award."

The vice chancellor's decision elaborated on the idea that the investment funds that didn't go to the trouble of suing had a financial motivation now to object.  Following a 10% fee trend in federal securities actions, he noted, would have given them an extra $49 million for the equity holders, rather than sharing it with the class.  Five law professors suggested in a friend-of-the-court brief that a 15% fee would be appropriate, which still would have added $35.78 million to the objectors' recovery, the vice chancellor's decision noted.

"Having sat back and done nothing, the objectors now claim that a fee award without a sizable reduction would 'not yield equitable results,'" the vice chancellor wrote in an August filing confirming the $266.7 million fee award.  "That assertion masks self-interest with an appeal to equity.  Wanting more money for yourself is understandable, but it is not grounds for a fee objection."

Seventh Circuit Scraps $57M Fee Award in Antitrust Case

August 30, 2023

A recent Law 360 story by Celeste Bott, “7th Circ. Scraps $57M Chicken Price-Fixing Atty Fee”, reports that the Seventh Circuit threw out a $57 million attorney fee award in a $181 million deal for chicken buyers in sprawling antitrust litigation, saying that the district court failed to consider bids made by class counsel in auctions in other cases and fee awards in different circuits.  Objector John Andren had taken issue with the roughly one-third cut of the settlement that Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC were to receive in a deal the firms had struck with Fieldale Farms, Peco Foods, George's, Tyson Foods, Pilgrim's Pride and Mar-Jac Poultry in the sprawling antitrust case.

A three-judge Seventh Circuit panel complimented the lower court for its "fine job of shepherding" the complex litigation, but said it made a mistake when it discounted bids made by one of the two firms serving as class counsel in other cases because the proposals had declining fee scale award structures.  The published opinion concluded that "it was error to suggest that this court has cast doubt on the consideration of declining fee scale bids in all cases."

"In the district court's view, this court has explained that these awards do not reflect market realities and impose a perverse incentive insofar as they ensure that attorneys' opportunity cost will exceed the benefits of seeking a larger recovery, even when the client would otherwise benefit," the panel said.  "Yet, this court has never categorically rejected consideration of bids with declining fee scale award structures.  Rather, the nature of the typical costs in litigation must be assessed in determining whether counsel and plaintiffs would have bargained ex ante for such a structure."

The Seventh Circuit has observed that such a fee structure, where the amount being awarded in fees goes down as the settlement amount goes up, can present certain advantages, and the appellate court took that approach in another case — In re: Synthroid Marketing Litigation — which was a class action suit against the manufacturer of a synthetic thyroid drug.

"Fees do not always decline for securing a larger recovery, and in those instances, counsel will have an incentive to seek more," the panel said.  "Accordingly, the appropriateness of a declining fee scale award structure may depend on the particulars of the case.  It was an abuse of discretion to rule that bids with declining fee structures should categorically be given little weight in assessing fees."

Andren had also argued that the lower court should have taken into account that class counsel frequently did work in Ninth Circuit district courts, which employ a lower 25% "benchmark" for presumptively reasonable attorney fees.  The appellate panel agreed that the district judge shouldn't have categorically assigned less weight to Ninth Circuit cases in which counsel was awarded fees under a mega-fund rule.

"It is true that this court has rejected the application of a mega-fund rule.  Yet, continued participation in litigation in the Ninth Circuit is an economic choice that informs the price of class counsel's legal services and the bargain they may have struck," the panel said.  "The district court should have considered where class counsel's economic behavior falls on this spectrum and assigned appropriate weight to fees awarded in out-of-circuit litigation."

In addition to vacating the fee award, the panel remanded the matter for "greater explanation and consideration" of the factors it laid out, noting that it expressed no preference as to the amount or structure of the award, just the need for further review.