Despite some major recoveries in class actions over excessive 401(k) fees, the group of lawyers litigating these cases remains small, as few are willing to put the whole firm at risk, Law.com reported today. Jerome Schlichter, a founding partner at 21-attorney Schlichter Bogard & Denton, who filed the first 401(k) lawsuits in 2006, said he knew from the start that these cases had the potential to put his firm out of business. When Schlichter took on his first 401(k) class action, about 10 years ago, he found that no other firm was filing similar actions for excessive plan fees. By the time he filed a complaint, he had already put nearly two years into researching industry practices, he said. At first it seemed the defendants, with their double-digit teams of lawyers, would succeed in killing the effort, he said. In Tussey v. ABB, for example, defense counsel for ABB and Fidelity received $42 million in fees, according to a court filing in that case. Instead of backing away, Schlichter Bogard took the necessary steps to fight back. And now, suits are on the rise and so are the settlement figures and attorney fee recoveries.
