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A PRACTITIONER'S PERSPECTIVE ON
THE SELECTION OF CLASS COUNSEL
May 2001
 
Introduction
The use of a court-supervised selection process aids in the establishment of an efficient and definite leadership structure from the outset of litigation. If plaintiffs' counsel are left to organize themselves, without court supervision, the political considerations governing that organization process may not all be in the best interest of the class.
The court, in carrying out its fiduciary duty to the class, should oversee the selection process at the outset and choose counsel for the class based on considerations of both quality and price of representation. The court should appoint, for the class, the best counsel for the lowest cost.
Where a proposed fee is established at the outset and has been factored into the court's selection of counsel, it must be allowed to inform the court's award of fees at the end of the litigation.
The Status Quo
Frequently, in a class action context, multiple law firms will have filed similar complaints, alleging the same claims against the same defendants and proposing to represent the same class. At some point, in order to drive the litigation forward in a cost-effective and efficient manner, plaintiffs' counsel must be organized and a leadership structure established.
Common sense dictates that this must occur as early as possible in the litigation, and the benefits to all parties involved, including the court, the class and counsel, are undisputable. Establishment of such a structure identifies for the court and defense counsel the attorneys who will have authority to act on behalf of and bind the plaintiffs, thereby reducing confusion and streamlining contact procedures.
Appointment of lead counsel also creates a clearinghouse for plaintiffs' litigation strategy and work assignments, thereby eliminating uncoordinated efforts and preventing attorneys from later attempting to charge the class for duplicative or unnecessary work.
Aside from the securities context, there is no statute or rule that prescribes such an organization process at the inception of a case, and no requirement for the court's active involvement in the process, although the Manual for Complex Litigation, Third, certainly recommends the designation of lead counsel, liaison counsel, and/or steering committees at the outset of every complex case, and suggests procedures and criteria for their selection. Some version of this process, culminating in court appointment of lead counsel, occurs in most "MDL" litigation shortly after coordination and transfer to the transferee court.
Under the current version of Rule 23 of the Federal Rules of Civil Procedure, class counsel is not formally appointed until class certification is granted, which can occur relatively late in the litigation, depending upon the amount of motion practice over the complaint and the discovery allowed prior to class certification.
When there is no formal procedure in place, plaintiffs' counsel prefer to devise an organizational structure on their own, turning to the court as a last resort to resolve disagreements as to the appropriate level of participation of competing firms in the litigation. In the larger cases, the negotiation of a leadership structure acceptable to all plaintiffs' counsel may be a more impressive feat than any eventual settlement with the defendants. Where this process is performed solely by plaintiffs' counsel, and without court supervision, a number of considerations shape the ultimate leadership structure.
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Notice: Lieff Cabraser attorneys provide legal advice and practice law for clients in federal district courts throughout the United States and in state courts where we are licensed to practice. In states in which our lawyers are not licensed to practice, we have affiliations with local attorneys who serve as co-counsel with our firm. Please read our disclaimer.
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