On June 24, 2010, a New York federal court resolved a fee dispute in a  pending securities fraud class action against Comverse Technology.  The company agreed last year to pay $225 million to settle the litigation.

Pomerantz Haudek, the lead plaintiffs’ firm in the case, sought 25 percent of the settlement, or a fee of about $56 million. A one-third contingency fee, of course, has long been the industry benchmark, but plaintiffs’ lawyers in big-dollar securities fraud settlements sometimes request fees of 15 percent or less. (Lawyers can have a hard time convincing judges to award counsel one-third of settlements that reach into the many billions of dollars.)

In the Comverse case, the Pennsylvania State Employees’ Retirement System, which owned shares in the company, claimed in court papers that the 25% fee request was “unreasonable,” the New York Law Journal reports.  But a Pomerantz Haudek lawyer told the New York Law Journal that the the firm’s client had agreed to a 25% fee and that such an amount is “well within the normative range of these types of cases.”

In his ruling, Brooklyn federal judge Nichoals Garaufis agreed that a 25 percent fee was within the norm for “megafund” securities fraud cases.  “While it may be that a lower percentage would also be sufficient, this court will not pretend that it has the expertise necessary to divine the ideal percentage,” the judge added. “This court is particularly unwilling to undertake an endeavor in a case where the fee award was set on the open market, and where an improperly calibrated fee would provide a disincentive to future counsel to take risks and pursue large class settlements that the SEC cannot.”

So, what are attorneys worth?  In this case, they are worth $56 million total and for the 25 attorneys at Pomerantz, this means they are each worth $2.24 million.  Not a bad day for this firm at all!

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