As I have previously noted (for example here), a number of reports have analyzed the 2017 approved securities class action lawsuit settlements in statistical and numeric terms, such as the aggregate, average, and mean settlement amounts. But what do the 2017 securities suit settlements look like when broken down according to the lead plaintiffs’ firm that negotiated the settlement? An April 4, 2018 study from ISS Securities Class Action Services entitled “The Top 50 of 2017” (here) takes a look at this issue and reports some interesting conclusions, discussed below. The organization’s April 4, 2018 press release can be found here.
According to the report, there were 162 approved North American securities class action settlements. (The report does not say so explicitly, but the reference to “North America” seems to suggest that the data set includes Canadian securities class action settlements as well as U.S. settlements. The various tables in the report include references to Canadian law firms, which seems to corroborate that Canadian settlements are included.) Of the 162 settlements, there were 113 approved settlements that provided for monetary shareholder recoveries.
2017 was actually something of a down year for securities suit settlements. The aggregate amount of monetary shareholder recoveries during the year was $2.1 billion, representing a “marked decrease” from the $7 billion recovered in 2016 and the lowest yearly total in more than ten years. (2018 by contrast is already off to a roaring start, with the total recoveries announced – including the $3 billion settlement in the Petrobras case – already exceeding the 2017 totals.)
The report breaks down these 113 settlements with monetary recoveries according to the law firms that served as lead or co-lead counsel. (The report credits each of the law firms listed with the entire settlement amount, regardless of how many other firms served as lead or co-lead counsel in the case.)
The report lists the Bernstein Litowitz law firm as having had the highest total of shareholder recoveries during the year, with $639 in total settlement funds recovered during 2017. $210 million of the law firm’s total is attributable to the largest 2017 settlement in the Salix Pharmaceuticals case. As I noted in a prior post discussing ISS Shareholder Class Action Services’ updated report on the Top 100 all-time securities settlements, the Bernstein Litowitz firm has the most Top 100 settlements, with the firm serving as lead or co-lead counsel in the 33 of the Top 100 securities class action lawsuit settlements.
The Robbins Geller law firm came in at second place on the 2017 Top 50 list, with $344 million in total settlement funds recovered. The report notes that Bernstein Litowitz and Robbins Geller have both finished in the top two positions on the list, in various orders for five straight years. As discussed in my prior post about the Top 100 all-time settlements, the Robbins Geller firm (inclusive of predecessor law firms) is second on the Top 100 list, with 17 of the largest settlements (including the largest ever settlement in the Enron case.)
Places three through five on the Top 50 list include the Cohen Milstein firm, in third place, with recoveries of $203 million; the Levi & Korinsky law firm in fourth place, with recoveries of $200 million; and the Block & Leviton law firm at $198 million. A total of eleven law firms had aggregate shareholder recoveries during the year in excess of $100 million.
While it is interesting to look at the law firms at the top of the list, it is also interesting to scroll down to the bottom of the Top 50 list. It is pretty quickly apparent from looking at the bottom of the list that the magnitude of the aggregate recoveries involves thins out pretty dramatically the further down the list you look. For example, the number 50 law firm on the list, The Weiser Law Firm, just squeaked into the list’s last spot with total recoveries of $750,000. While most of the law firms listed in the top 25 are familiar, there are a number of firms that are unfamiliar (to me, at least) in the bottom 25.
In addition to ranking the law firms by aggregate recovery amounts, the report also ranks the law firms in terms of the number of settlements in which they served as lead or co-lead counsel. The number of settlements list looks quite a bit different than the total amount recovered list. The Rosen Law Firm tops the list for the highest number of settlements, with 22 settled cases. The 22 cases that the Rosen Law Firm settled during the year resulted in total shareholder recoveries of $55.4 million, which was in 18th place in the amount recovered rankings.
The Robbins Geller law firm had the second most number of settlements in 2017, with 21 settled cases. The Bernstein Litowitz firm, which was top of the list in terms of amounts recovered, was fourth on the number of settlements list, with 11 settled cases.
Assuming for the sake of discussion that the $3 billion Petrobras settlement receives final approval during calendar year 2018, the 2018 Top 50 law firm ranking according to amount recovered could look quite a bit different than the 2017 version. The lead plaintiffs’ counsel in the Petrobras case is the Pomerantz law firm, which seems likely to be at the top of next year’s shareholder recoveries list (or at least on the list in whatever year the settlement receives final approval). The Pomerantz law firm was in eighth place on the 2017 list, with settlements of $166 million.
I noted above that the ISS Securities Class Action Services settlement data set apparently includes data pertaining to Canadian settlements. In that regard, it is interesting to note that the Siskinds law firm, which is based in Ontario, is listed in 19th place on the amount recovered list, with shareholder recoveries of $52 million. The Siskinds law firm also tied for ninth place on the number of settlements list, with five cases settled.
The report only analyzes the monetary amounts that the various law firms recovered in settlements. The report does not go on and further analyze the amounts that each of the firms received in fees in the settlements. The percentage amount the various firms ultimately received as fees in the various cases undoubtedly varied, if we were to assume for the sake of discussion that the fee amounts awarded average around, say, 20 percent, we can speculate about the range of fees that the firms may have been awarded.
So, for example, if the fee awards in the cases the Bernstein Litowitz averaged 20 percent, we can speculate that the firm was awarded fees during 2017 in the range of $126 million. To be sure, this is nothing but a wild guess, and the actual amount probably varied by a significant amount. But even if the firm’s average fee award percentage was only 15 percent, the amount of fees the firm was awarded was about $95 million, which is still an impressive amount of money. Without knowing for sure what the average award percentage was, we can at least be sure that the law firm scored a significant amount of money in terms of fees. (Added Note: A loyal reader points out that in one or more of the settlements, the Bernstein Litowitz firm may have been co-lead counsel, or might otherwise been in an arrangement requiring the firm to share fee recoveries. Obviously the actual amount of fees realized by the firm would have been reduced to the extent the firm was required or committed to sharing fees.)