Legal News

In Xerox Class Action, Fees for Temp Lawyers Take Center Stage

By Ashby Jones

Here’s a question: After a big class-action settlement, how much should a plaintiffs’ firm be allowed to recover for its use of temporary lawyers? As much as $100 per hour? $200 per hour? More?

The issue recently came up in a class-action settlement involving a $750 million settlement with Xerox and its former auditor, KPMG. According to the story, from Forbes.com, a fee request pending in a Connecticut district court suggests that the lawyers who negotiated the deal want to take home roughly $83 million in fees for the temp lawyers, who only cost the firm an estimated $11 million in the first place. The $83 million sum reportedly represents more than half of the $150 million the lawyers want to take home for their trouble.

According to the story, Stephen Vasil, a Yale Law School graduate, and Andrew Gilman, a New York University law grad, were hired through a temp agency to work on the Xerox case. Vasil says they often performed work that didn’t exactly require their pricey law degrees, including reviewing electronic documents to identify their author and destination. Vasil was paid $35 an hour, Gilman, $40. Yet the law firms in the case are asking for roughly $500 an hour for their services.

“We joked we could hire a bunch of 10-year-olds to do it for us,” says Vasil, 34.

Glen DeValerio, a partner at Berman DeValerio Pease in Boston, the lead attorney in the case, acknowledges temp attorneys did some routine coding but says that due to the nature of document review, it was largely unavoidable. “They give you all kinds of silly stuff and somewhere in there is the meat of it,” DeValerio says. Courts consider work by any lawyer to be worth a full market rate, he says.

And what does the client — the state of Louisiana — say about this? Not a whole heckuva lot, it seems. The state, in a statement, says it “has been actively involved” in the case, but the fee “is determined by the federal district court judge handling the case.”

“If you’d had an actual, vigilant client, nobody would countenance these temps,” says Gilman.

Full post as published by Law Blog - WSJ.com on November 24, 2008 (boomark / email).