The Minnesota Court of Appeals issued an opinion this week in the case of Williams v. Heins, Mills, & Olson that considers such interesting legal issues as  misrepresentation-by-omission, minority shareholder rights, punitive damages and prejudgment issue.  What I found really interesting, however, was the peek it provided into the finances of class-action securities fraud lawyers. 

Brian Williams joined the law firm of Heins, Mills & Olson (“HMO”) in 2000 and became a partner in 2003.  In May 2004, Williams became a non-equity member of the firm, entitling him to a five percent interest in net firm income.  A dispute over how that 5% would be calculated is what led to the lawsuit.

Williams claimed to have billed 2,400 hours per year in 2004-2005, “giving up time with his family, and volunteering and coaching opportunities.”  In exchange, between September 2005 and December 2006 Williams received almost $4.5 million in distributions following receipt of class-action fee and cost awards, including $335,953 on September 21, 2005 (the Broadcom distribution ); $11,072 on June 1, 2006 (the Relafen distribution); $4,164,975 on November 2, 2006 (the AOL distribution); and $49,513 on December 6, 2006 (the Laminates distribution).   (As context, the HMO website describes the Broadcom matter as a $150 million settlement received as lead counsel for the shareholder class in Securities Fraud Litigation). 

Williams resigned from HMO in January 2007,  and sued two months later.  He claimed that the firm had misrepresented his share in the distributions, and that he was entitled to an additional $2.1 million.  After a trial, a jury awarded him $1.65 million in damages, but denied him any punitive damages.  The Court of Appeals affirmed various rulings made by the lower court.   Assuming that the Minnesota Supreme Court does not reverse, that means Williams walked away with more than $6.5 million during a few years at HMO.  Not bad for a non-equity member. 

Gentle reader:  please know that most lawyers do not take home anything close to these amounts and that, like you, we are just trying to support our families.

snark