The $3,000 Hour Was Unreasonable. The $22.7 Million Fee Was Not.

The court approved the settlement and audited the price of counsel

The litigation began in 2019. Plaintiffs alleged that Google Assistant devices recorded private conversations after false activations and that Google used or disclosed resulting information. Google denied wrongdoing and settled to avoid the risk, expense, and uncertainty of continued litigation. The October 13 order granted final approval to a $68 million non-reversionary fund, approved $1,021,738.40 in litigation expenses, and awarded each of four class representatives $5,000 rather than the $10,000 requested.

For class counsel, the court awarded one-third of the fund: $22,666,666.70. That exceeded the Ninth Circuit's usual 25 percent benchmark. Judge Freeman found the upward departure justified by the result, the more than six years of contested litigation, the risk that counsel might recover nothing, and the quality of the work. She described the settlement as excellent.

Then came the hourly-rate analysis. Counsel reported more than 20,000 hours and used those hours to calculate a lodestar, meaning reasonable hours multiplied by reasonable rates. The court rejected a proposed $3,000 rate for one senior lawyer, along with several other rates above $1,600, and capped the affected rates at $1,600. Reuters reported that the $3,000 proposal concerned about 64 hours and roughly $194,100 of claimed lodestar value.

The adjusted lodestar still roughly matched the percentage award. The order calculated a multiplier of about 1.01. In other words, after correcting the rates the judge found excessive, the $22.7 million fee remained close to the reconstructed value of the work. The court did not excuse the high rate. It showed that the result did not depend on it.

Percentage and lodestar answer different questions

Rule 23(h) permits a court to award reasonable attorney fees authorized by law or the parties' agreement. In a common-fund settlement, courts in the Ninth Circuit may use a percentage of the recovery or the lodestar method. They often use one as the principal calculation and the other as a cross-check.

The percentage method asks how much of the value created for the class should compensate the lawyers who produced it and bore the risk of nonpayment. It connects compensation to the fund rather than to the number of hours accumulated. The lodestar asks what reasonable hours at reasonable market rates would total, sometimes adjusted by a multiplier. It makes time, staffing, and rate evidence visible.

Neither method is neutral. A percentage can overpay counsel when a very large fund results from work that was comparatively routine. A pure lodestar can reward delay, duplication, and unnecessary labor because more hours increase the fee. The cross-check is meant to expose those distortions without pretending that contingent litigation is simply hourly work paid years late.

The Ninth Circuit made that point in Vizcaino v. Microsoft. The lodestar can provide perspective on a percentage award, while a system tied only to hours can discourage early settlement and fail to reward efficient success. In re Bluetooth likewise instructs courts to look for unreasonable results and scrutinize the relationship among the class benefit, the fee, and the work claimed. The two methods are not rival truths. They are different instruments for detecting a bad price.

A market rate is evidence, not a magic phrase

Lawyers frequently defend a high rate by pointing to the market. That is relevant, but market is not one thing. A client may pay a particular partner $3,000 for a crisis, a specialized transaction, or an existential appeal. A bankruptcy court may approve rates in that range for restructuring counsel. A class-action court conducting a lodestar cross-check may ask whether comparable lawyers doing comparable work in that forum actually command the same amount.

The Google Assistant order rejected the submitted $3,000 rate even as reporting shows that some elite lawyers now quote or receive rates above that figure. The distinction is not semantic. A posted rate, a negotiated rate, a collected rate, and a rate a court finds reasonable for fee-shifting or a common fund are different facts. They may converge. They need not.

That should make firms more careful about rate evidence. A declaration that rates reflect experience and prevailing California practice is a starting point, not proof by repetition. A persuasive record explains comparable work, actual client acceptance, collection experience, the lawyer's role, the scarcity of the expertise, and why the assignment required that lawyer rather than a less expensive professional.

The same discipline applies outside class actions. A general counsel deciding whether to approve a premium partner rate is not evaluating professional prestige in the abstract. The question is whether the lawyer's judgment changes the risk, time, or outcome enough to justify the price. A court performing a lodestar analysis asks a related but legally structured question. Both are entitled to separate the lawyer's value from the firm's aspiration.

The loudest number may not be the cost driver

A $3,000 hourly rate is irresistible copy because it translates immediately into ordinary life. One hour exceeds many monthly mortgage payments. But the total cost of legal work is usually controlled by the system around the rate: how many people attend, who drafts, how many review layers exist, whether work is repeated, which tasks are delegated, how long decisions wait, and whether the fee places outcome risk on counsel or the client.

In this case, the proposed $3,000 rate applied to a small share of the reported hours. Cutting it sharply changed the lodestar without defeating the total fee. That is the point the headline can miss. A court can find one input inflated while concluding that the overall compensation remains proportionate to the recovery and risk.

Clients should learn the same lesson before attacking the highest line item and declaring the budget fixed. A matter staffed with one expensive lawyer who resolves the decisive issue quickly may cost less than a matter crowded with lower-rate timekeepers. Conversely, a premium partner can become a very expensive routing layer if every question travels upward without adding judgment.

Firms need two records. The first supports the rate. The second supports the way the matter was staffed and managed. Rate cards without role discipline invite skepticism. Efficient staffing without a defensible explanation of premium rates leaves the court or client to supply its own number.

The award still belongs in the class's arithmetic

Defending the methodology does not require pretending that $22.7 million is small. It comes from the settlement fund and reduces the amount available for class members. That is why judicial review exists. Class members are largely absent from fee negotiations, and the defendant usually cares about its total payment rather than how the fund is divided after settlement.

A one-third award above the circuit benchmark therefore needs an explanation tied to the actual case. Duration alone is not enough. Risk alone is not enough. A large result alone is not enough. The court must evaluate the recovery, the litigation history, the quality and efficiency of the work, objections, comparable awards, and the lodestar evidence. The Ninth Circuit's Apple device-performance decision emphasizes that any departure from the benchmark should be explained before the lodestar cross-check is used to confirm it.

Judge Freeman did that work and still made visible corrections. She lowered senior rates, halved the requested service awards, and approved the full fee. Someone may disagree with the final allocation or pursue an appeal. But the order cannot fairly be reduced to either of the easy slogans that lawyers charged $3,000 an hour or that the court rejected modern market rates. The court separated inputs from outcome.

That separation is the useful professional lesson. Legal pricing is not made reasonable by a familiar percentage, an impressive rate, or a long time sheet. It becomes defensible when the method, evidence, risk, staffing, and result point to the same answer. Here, one input failed. The fee did not.

The court did not decide that $3,000 can never be a market rate. It decided that counsel had not justified using it in this lodestar cross-check.