Federal Judge Blasts $360-Per-Hour Fees For Contract Attorneys

A federal judge slashed $10 million from one class-action firm’s fee request in a $335 million settlement, saying much of it was based on the work of short-term “associates” who functioned as contract attorneys. In a Dec. 28 order, U.S. District Judge William Pauley awarded $41.3 million in fees and $1.4 million in expenses to Barrack, Rodos & Bacine. But Pauley noted that 16 “temporary associates” hired in 2013 and 2014 to work exclusively on the case represented 40 percent of the billable hours, and $10,8 million in fees at $362.50 an hour. That’s well above the prevailing rate for contract attorneys of less than $50 an hour. “This Court simply concludes that a reduction in the requested fee is warranted to avoid a windfall to Barrack for charging more than $350 per hour for associates who are contract attorneys in all but name, while simultaneously overstaffing the substantive legal work with high-priced partners,” Pauley wrote. “Leverage – the practice of billing out low-paid associates at $350 an hour or more – is under severe pressure at corporate law firms but plaintiff lawyers in class actions still get away with it, often paying outside agencies to supply roomfuls of contract attorneys to scan the millions of documents generated in a typical class action even though paralegals or computer software could do the work just as well,” Fortune reports.