Opinion ID: 6342044
Heading Depth: 2
Heading Rank: 3

Heading: Amount of Work

Text: A third factor that aﬀects the market rate for legal fees is “the amount of work necessary to resolve the litigation.” Synthroid I, 264 F.3d at 721. A reduction may be warranted if the requested fee award is “disproportionate to the amount of work expended by class counsel.” Camp Drug Store, 897 F.3d at 833. We have recognized that some bids in class-counsel auctions compensate lawyers based on how far the litigation progresses. Synthroid I, 264 F.3d at 721–22; see also Hale, 2018 WL 6606079, at  (noting that “sophisticated market players typically set higher fee percentages when a case resolves during or after trial”). All other things being equal, a case that settled before the motion-to-dismiss stage, for instance, would be No. 20-2055 19 expected to result in a lower fee than a case that proceeded all the way to trial or beyond. Such terms are common in private fee agreements and “tie the incentives of lawyers to those of the class by linking increased compensation to extra work.” Synthroid I, 264 F.3d at 722. 8 Here, the district court did not give suﬃcient weight to the early stage at which the case settled. The court made a passing reference to the early settlement in concluding that lead counsel had secured a good outcome for the class. (We are not as convinced the settlement was a good outcome, see note 3, above, but neither Petri nor anyone else is challenging here the $45 million settlement total.) But the court did not address whether the preliminary stage of the litigation warranted a reduction in the requested fee. See Camp Drug Store, 897 F.3d at 833 (upholding district court’s reduction of fee award where there was no paper discovery, no depositions taken, and no substantive motions ﬁled). To be sure, this lawsuit involved more than “merely ﬁling a complaint and negotiating a settlement.” Id. Because of the early settlement and the information lead counsel already had, however, it was not a case where the ﬁrm had to engage in extensive discovery or defend against a summary judgment motion. Cf. Silverman, 739 F.3d at 958–59 (approving 27.5 percent fee award where case settled after defendant’s motion for summary judgment was 8 Lead counsel themselves appear to have previously signed a retention agreement that tied attorney fees to how far the litigation progressed. In In re RH, Inc. Securities Litigation, No. 17-00554, 2019 WL 5538215 (N.D. Cal. Oct. 25, 2019), a securities class action brought by a Chicago pension fund, lead counsel agreed ex ante to a 15 percent fee “if a settlement was reached after a ruling on a motion to dismiss and before a ruling on summary judgment.” Petri App. A202. 20 No. 20-2055 denied and counsel spent more than $5 million on discovery and experts). As noted above, moreover, the district court did not discuss the impact of the prior litigation. That groundwork reduced not only the risk of nonpayment but also the amount of work required of class counsel. Without it, class counsel would have had to spend much more time and resources gathering evidence and taking depositions of Stericycle executives and employees. Again, we do not doubt that class counsel still needed to shoulder a substantial burden to achieve the result they did. They have earned a multimilliondollar fee here. But the prior litigation reduced that burden substantially. The district court should have given much greater weight to that factor in evaluating the fee request. Because the district court did not adequately consider the ex ante fee agreement, the risk of nonpayment, and the amount of work involved, we remand for reconsideration of the 25 percent fee award consistent with this opinion. 9