Tobacco Lawyers' Award Cut Under Investigation

There's big money in big tobacco and trial lawyers got a big chunk of it from the 1998 tobacco settlement.

In New York state alone, lawyers were awarded $625 million for their work on the landmark case that netted $246 billion. The fee comes to about $13,000 per hour of work.

"I think if this isn't greed you have to wonder what is," said Walter Olson, a senior fellow at the Manhattan Institute, a think tank that focuses on economic choice and individual responsibility.

Trial attorneys across the country fared just as well in what Olson calls the biggest windfall ever in the legal community.

"They set things up so the settlement would be difficult to challenge in court and mostly that worked for them," Olson said.

Well that worked until New York Judge Charles Ramos came along.

The state Supreme Court plans to investigate whether the award is not just excessive but unethical.

A little-known provision in the New York Lawyers Code of Professional Responsibility says, "A lawyer shall not ... charge or collect an illegal or excessive fee."

The measure of excess is based on time, labor and skill required for the case as well as customary fees, and the experience and reputation of the law firm, among other factors.

None of the New York law firms involved in the settlement would speak with Fox News about the fees. The American Trial Lawyers also refused comment.

But supporters say the firms negotiated their fee as 2.5 percent of the settlement, which is not much considering lawyers usually earn between 10 and 30 percent of awards.

But since New York received $25 billion in the tobacco deal, critics say the fee should have been much smaller.

"Lawyers are not entitled to grab as many chips off the table as they feel like," Olson said. "They take an oath as officers of the court and that means sometimes leaving some of the money on the table."

That money could have gone where the rest of the settlement went, Olson said, to the state's Medicaid fund, which pays for health care for the state's low-income beneficiaries.