Law firm will have to divulge how much it paid contract lawyers in Citigroup case
Kirby McInerney, a New York-based plaintiffs' firm, will have to disclose how much it paid the contract attorneys that it hired in its class action lawsuit against Citigroup.
U.S. District Judge Sidney Stein made the ruling on February 28 in Manhattan. Ted Frank, a Citigroup shareholder, made the request for discovery against the firm. He is well known in legal circles for his efforts to reform the way class action lawsuits are handled.
His fight against Kirby McInerney began when the law firm was able to get Citigroup to agree to a settlement of $590 million on behalf of its clients. The agreement resolved claims related to the toxic mortgage assets.
Frank in his lawsuit said that the firm's fees were excessive when it sought almost $100 million in legal fees, including some amount for the use of outside contract attorneys. Frank's argument is that these contract attorneys are usually paid around $50 per hour while the law firm billed their work as being of $1000 per hour and the work performed was document review work.
Kirby McInerney has however said that Frank had “denigrated” the work performed by contract attorneys and the work that they had done was in fact, often the same as performed by firm associates.