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Posted Jan 05, 2017 07:00 am CST
A federal judge in Manhattan has approved a $335 million settlement in an investor lawsuit against Bank of America, but he balked at one aspect of a request for $51.6 million in attorney fees.
U.S. District Judge William Pauley questioned the billing rates for temporary associates hired by Barrack, Rodos & Bacine, and chopped $10.3 million from the law firm’s fee request, report the Legal Intelligencer (sub. req.) and Fortune. His opinion is here.
The lawsuit had alleged Bank of America downplayed its exposure to repurchase claims related to faulty mortgages, and made misleading statements about risks related to its reliance on a national mortgage database.
During the litigation, the Pennsylvania-based Barrack firm had 42 lawyers working on the case. Among the lawyers were 16 temporary associates hired in 2013 and 2014. The lawyers were allowed to participate in health and 401(k) plans at Barrack, but their average stay at the firm was only one year. Yet their work was billed out at a blended associate rate of $362 an hour, Pauley said.
The law firm also devoted 11 partners to most of the substantive work relating to motion practice and mediation, Pauley said. At least four Barrack partners attended mediation sessions in the case.
Pauley cited the staffing and billing rate decisions in reducing the fee award.
“It must be noted that this reduction is not a rebuke of Barrack’s structure as a lean, partner-heavy firm that hires associates when necessary to prosecute large actions such as this one,” Pauley wrote. “This court simply concludes that a reduction in the requested fees 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.”
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