A recent NLJ story, “Judge Approves $601.5 Million Settlement with Countrywide” reports that U.S. District Judge Mariana Pfaelzer in Los Angeles has approved a $601.5 million class action settlement between Countrywide Financial Corp and its shareholders – the largest securities agreement to come out of the housing crisis.  More than two dozen large institutional investors opted out of the settlement, forcing both side to reduce the settlement from $624 million.

Labaton Sucharow, the New York law firm hired by several New York pension funds on a contingency basis to pursue securities fraud claims against Countrywide and its senior managers, sought $46.5 million in attorney fees, nearly $1 million less than its initial request, which represented 7.59% of the total settlement.  The new request represents 7.73% of the total agreement.  Labaton Sucharow sought $8 million in expenses.

Pfaelzer appeared surprised by the enormous expense of the case, particularly when the discussion came to attorney fees.  “It’s startling how much litigation costs,” she said.  “It’s always far more substantial than I think in terms expenses.”  Pfaelzer, who confessed she is “not as a rule very generously disposed toward attorney’s fees of this size,” said she was shocked by the sheer magnitude of the fee request in this case.  But she also recognized that the percentage sought was below average when compared to similar settlements.