Judge Delays Ruling On $258 Million Microsoft Lawyer Fees Request

SAN FRANCISCO (AP) -- Lawyers who persuaded Microsoft Corp. to settle their class-action lawsuit accusing the company of price-fixing are asking for $258 million in legal fees, the largest amount ever in an antitrust case.

At a hearing Wednesday where a decision was expected, San Francisco County Superior Court Judge Paul Alvarado said he would rule as soon as practically possible. The judge, without hearing arguments, said he was "not prepared" to say "what I'm going to do."

The lawyers' bill comes as attorney fees are being examined critically by the American Bar Association and lawmakers across the country. It amounts to about $3,000 an hour for one lawyer, more than $2,000 an hour each for 34 other attorneys and $1,000 an hour for administrative work.

Microsoft agreed to the settlement--allocating $1.1 billion for California consumers--after a small San Francisco law firm sued in state court alleging the company inflated prices by monopolizing the pre-installed software market from 1995 to 2001.

But Microsoft could end up spending much less. The deal enables anyone who bought a computer in California to get vouchers worth $5 to $29 per Microsoft product, but only a small fraction of the millions eligible have applied for the money. Two-thirds of the unused settlement, however, is earmarked for poor California schools.

The lead attorney in the case, Eugene Crew, told the judge in legal briefs that he deserves about $3,000 for each of his 6,189.6 billable hours, "considering the enormity of this undertaking against the most powerful corporation in America."

Lawyers from 35 firms joined the suit, which was filed in 1999 under California's unfair competition law and settled four years later. The requested fees represent about 25 percent of the settlement.

Normally, attorneys charge clients about a third of what's recovered, but in class-actions they negotiate fees with the losing party and the judge.

Microsoft opposes the fees, and said the lawyers deserve no more than about $75 million combined.