Judge slashes legal fees in Citigroup settlement

US class action firm Kirby McInerney saw its legal fees cut by nearly a third in a $590 million settlement of a securities class action against Citigroup.

The firm, which had claimed nearly $100 million in fees, was slammed by the judge in the case who accused the firm of ‘waste and inefficiency’ as well as ‘significantly inflated’ hourly rates, according to Forbes. This included $28.6 million for the work of contract lawyers and $17 million for all other lawyers in the case.

Contract lawyers

New York District Judge Sidney Stein reduced the fees by 27 per cent to $70.8 million and strongly criticised the tens of thousands of lawyers billed for after the settlement – when the contract lawyers spent many hours reviewing documents. He cut 16000 hours worth £7.5 million from the bill and another 10 per cent for ‘waste and inefficiency that a paying client would not accept.’

Much of the wrangling occurred over contract lawyers and the rates charge out for these with the firm charging them out at around $400 per hour which, according to the Center for Class Action Fairness, was way over the odds as they earn around $50 per hour. However, the judge agreed to settle at $200.

Judge slashes legal fees in Citigroup settlement

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