|[March 15, 2013]
The In-House Bar Challenges Excessive Fees for Contract ("Temp") Lawyers in Citigroup Securities Litigation
WASHINGTON --(Business Wire)--
Today, the advocate and voice of the in-house bar, the Association
of Corporate Counsel (ACC), filed an amicus letter with the United
States District Court for the Southern District of New York to offer the
in-house counsel perspective in Citigroup Securities Litigation.
ACC, a global bar association of more than 30,000 members who are
in-house lawyers employed by over 10,000 organizations, asked the Court
to re-calculate inflated fees that the plaintiffs submitted for contract
noted that over the past several years, the market for legal services
has softened significantly. As a result, negotiating power has shifted
from law firms to clients. It also noted that today's market does not
permit law firms to charge such high mark-ups for temp or contract
lawyers. It continues that in-house counsel have worked to secure more
value for every dollar spent on legal work, without paying significantly
marked-up fees for contract lawyers. According to ACC's 2011 survey
with The Wall Street Journal, 65.1 percent hired the contract
lawyers themselves and only 12.3 percent used contract lawyers hired by
"In requesting fees for themselves, class action lawyers must live with
the same market forces as everybody else and are not permitted to
distort them for their own gain," said Amar
Sarwal, vice president and chief legal strategist for the
Association of Corporate Counsel. "And, since clients across the country
no longer accept huge markups on contract or temp lawyers, courts
shouldn't grant such markups to class action lawyers either," Sarwal
Value Challenge, in-house counsel have worked with law firms to
adopt practical business principles that address changes in the legal
market, such as value-based fee arrangements or project management.
ACC requested that the court re-calculate fees submitted by the
plaintiffs' lawyers to better reflect the reality of today's market, as
legal precedent requires. As stated in ACC's letter, "the plaintiffs'
fee request ignores these marketplace realities. Maybe the plaintiffs'
attorneys paid their contract lawyers far more than the market demanded.
Or maybe they padded the actual rates with the sort of unjustifiable
profit margins that paying clients would refuse. Either way, there is no
basis in the law or in the market to justify the fee request for
"The plaintiffs' fee petition reads like it was written during the boom
times, when clients didn't always pay attention to how out of whack
legal fees had become. Unfortunately, for them, clients are far more
cost conscious and value-driven today," Sarwal added.
For developments on legal fees in Citigroup Securities Litigation,
or for information about ACC's Value Challenge and advocacy efforts,
About ACC: The Association of Corporate Counsel (ACC)
is a global bar association that promotes the professional and business
interests of in-house counsel through information,
opportunities and advocacy
initiatives. The association, which is celebrating its 30th
anniversary, has over 30,000 members employed by over 10,000
organizations in more than 75 countries. ACC connects its members to the
people and resources necessary for personal and professional growth. For
more information, visit www.acc.com
and follow ACC on Twitter (News - Alert) http://twitter.com/ACCinhouse.
By in-house counsel, for in-house counsel.®
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