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Trials & Litigation

Judge Cites ‘Egregious Breach’ of Ethics, Slashes Law Firm Fee from $12M to $500K

Posted Sep 28, 2010 3:11 PM CDT
By Martha Neil

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An antitrust class action over the fees charged to law graduates to take the BAR/BRI test preparation course for their bar exams was settled for $49 million in 2007.

The settlement by West Publishing Corp., which owns BAR/BRI, resolved claims that it made a secret market-monopolization deal with Kaplan Inc., which markets preparation classes for the Law School Admission Test. But there is still an ongoing battle over the legal fees for McGuireWoods, according to a National Law Journal.

Citing an "egregious breach of McGuireWoods' ethical duties," U.S. District Judge Manuel Real slashed the firm's award on Monday from the $12 million provided for in the settlement to $500,000, in a bench ruling, the article reports. The law firm violated California Rules of Professional Conduct, the judge said in an earlier opinion, by failing to tell class members of incentive payments of between $25,000 and $75,000 that were to go to lead plaintiffs. (The incentive fees have since been eliminated.)

Partner Sidney Kanazawa expressed disappointment about the decision in a written statement and said the firm plans to appeal. There "clearly was no egregious conduct" by his firm. Such incentive fees were approved in other cases, he said, and it was no secret that they were to be paid in this case.

Court documents show the case has cost his firm some $1.25 million in expenses and $5.6 million in attorney time.

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