Overview
In an opinion last week concerning a class action fee award, Judge Pauley reduced the requested $360 hourly rate for temporary associates at the plaintiff’s law firm, because he concluded they were functionally contract attorneys, who are ordinarily paid less:
Delegating the legwork of complex litigation (such as routine document review) to less-costly associates or temporary contract attorneys is common practice, and it is not this Court’s place to dictate law firm structure or workflow. What is troublesome, however, is [plaintiff’s firm’s] practice of “gear[ing] up” for discovery by hiring a large group of temporary “associates” and billing them at the firm’s standard rates for what this Court must assume was first-cut document review. . . . Although these attorneys were “full-time . .. associate attorneys” who were eligible to participate in the firm’s health insurance and 401(k) plans, not one of the sixteen remains at the firm—the group as a whole stayed an average of twelve months, some as few as one month. The new hires billed nearly 40% of the total hours in the case and generated $10,805,725 (or 31% of the lodestar) in legal fees . . . . … It must be noted that this reduction is not a rebuke of [the firm's] structure as a lean, partner-heavy firm that hires associates when necessary to prosecute large actions such as this one. Indeed, it is debatable which route more effectively advances a young lawyer’s career: temporary placement through a staffing agency on a document-review project, or brief full-time employment with the understanding that the job ends with the discovery deadline. This Court does not presume to resolve that question here. Rather, this Court simply concludes that a reduction in the requested fees is warranted to avoid a windfall . . . for charging more than $350 per hour for associates who are contract attorneys in all but name . . . .
