Posted Mar 01, 2013 07:05 pm CST
Ruling from the bench, a federal judge in Manhattan on Thursday gave a green light to a request for discovery by a class action activist concerning the wages paid by a law firm to the contract attorneys it billed out at $1,000 an hour.
Citigroup Inc. agreed last year to pay $590 million to settle a lawsuit brought by plaintiffs firm Kirby McInerney over the financial institution’s claimed papering-over of risks concerning toxic subprime mortgage debt. However, the law firm’s subsequent request for $100 million in legal fees brought objections from Citigroup shareholder Ted Frank, who contended that law firms typically pay contract attorneys around $50 an hour for the kind of work done in this case, Reuters reports.
“I think the court, and Mr. Frank, are entitled to specifics,” said U.S. District Judge Sidney Stein at a Thursday hearing, also agreeing to allow discovery concerning the contract attorneys’ qualifications.
In a January filing, Kirby McInerney said the contract attorneys do work that is “comparable to, and often the same as, the work performed by firm associates.”
Frank said in an email to Reuters that contract attorneys did about half of the work in the Citigroup case.
A law firm press release provides further details about the Citigroup settlement.
Attorneys representing Kirby McInerney did not respond Thursday to a request by Reuters for comment.
ABAJournal.com: “Does Legal Fees Motion in $590M Citigroup Case Include $1K Per Hour for Low-Paid Contract Lawyers?”