That’s what Bill Lerach, late of Milberg Weiss, could bag as Enron settlements mount toward $10 b
million. It seems Lerach has a sliding-scale contingency-fee arrangement with his lead plaintiff, the University of California, starting at 8 percent and going upward from there. And — this is the beauty part — it seems there’s a good chance courts will simply extend the percentage rates to apply to the many other investors in the plaintiff class, even though they never signed up to be Lerach clients or were given a chance to negotiate fees with him. No wonder class-action lawyers are so concerned to butter up the universities, pension funds, unions and other big institutional plaintiffs who serve as their stalking horses in these actions. The university, it seems, did not employ competitive bidding to invite participation by other potential counsel.
A critic of class action litigation, Lawrence Schonbrun, said he is suspicious of the university’s claims that it has vigilantly overseen the Enron case. A retired judge the university hired as a consultant on the case, J. Lawrence Irving, was paid more than $1.4 million by the state school, before being hired this month as a consultant by Lerach Coughlin. “This was not the ideal choice to monitor plaintiffs’ counsel,” Mr. Schonbrun said.
(Josh Gerstein, New York Sun, May 31).