Legal fees in the KPMG case
Milberg Weiss Bershad & Schulman, the New York law firm that helped get a class-action settlement with the accounting firm KPMG LLP is offering an unusual fee arrangement for outside lawyers. In exchange for persuading clients to join the class and drop their individual suits, the Milberg firm is offering outside attorneys a piece of their $30 million fee.
Milberg helped broker a $225 million settlement for clients who were sold fraudulent tax shelters by KPMG. The accounting firm offered them as legitimate investment strategies, but they later admitted wrongdoing and paid $456 million to the government in restitution. 17 former KPMG tax professionals have been federally indicted.
Michael Avenatti, the attorney for two clients who declined to participate in the class action, says Milberg should have gotten at least $500 million in any settlement.
This case is unusual because lawyers in class action suits rarely offer to share their fees with attorneys for non-class plaintiffs. However, if too many non-class plaintiffs proceed with their cases, KPMG can back out of the class settlement. This possibility may be the reason that Milberg is inviting more plaintiffs to join the class action.
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