Attorney profits from WSJ lawsuit that gets plaintiffs nothing  Ex-shareholders for the Dow Jones Company, the former owner of the Wall Street Journal, are questioning the appropriateness of the settlement of a lawsuit against the Bancroft family that will net a law firm $895,000, but nothing for the plaintiffs they represented.
"The notice of settlement covered four printed pages, with 15 numbered paragraphs. Reading it pretty closely, we found that our attorneys were proposing to settle the case against the former Dow Jones Board and the Bancroft Family, the former controlling shareholders," writes Richard Tofel, a former Wall Street Journal publisher, in an op-ed in the New York Sun. "What was in the settlement for us, we wondered? Nothing. What was in it for our lawyers? '[F]ees and expenses of up to $895,000, subject to Court approval.'"
Tofel goes on to explain that the law firm Harwood and Feffer had filed a suit alleging that the Bancroft family, the former majority shareholders in Dow Jones, failed to get the best price for the company's stock when they settled the deal with News Corp.'s Rupert Murdoch.
Ultimately, Harwood and Feffer settled the case, yielding only "two pieces of not very useful information" added to the public record about the Dow Jones Company, and no increase in the price paid by Murdoch.
Still, the firm held out that it deserved an unusual hike in its attorneys' fees.
"[Robert Harwood] believed he was entitled to a success fee — the term he prefers is 'multiplier on the lodestar' — of roughly another half million dollars," Tofel writes. "Put another way, our lawyers are seeking to be paid $877,000 for 725 hours of work at more than $1,200 an hour. A nice gig if you can get it."
Tofel argues that there is a broader problem at work in this case.
"We know this situation — a 'settlement'on behalf of all shareholders that yields them little, and their lawyers a lot — isn't unusual," he notes. "But that doesn't mean it's in the public interest. It's not."
 
| 
del.icio.us 
