WILMINGTON, DE — A new study by Stanford professor Joseph Grundfest has placed Delaware’s renowned Chancery Court under scrutiny for what many are calling excessive attorney fee awards. The report, based on an analysis of thousands of cases, reveals that Delaware courts issue attorney fee multipliers at rates up to 57 times higher than those awarded by federal courts. Some attorneys have received hourly rates as high as $35,000, sparking criticism and raising questions about the court’s role as the “gold standard” of corporate law.
The findings prompted a strong response from the advocacy group Citizens for Judicial Fairness, which has long called for reform in Delaware’s corporate legal system.
“This study confirms what we’ve been saying for years: Delaware’s Chancery Court is more interested in enriching lawyers than serving shareholders or protecting everyday investors,” the group stated. “Two judges, Chancellor Kathaleen McCormick and Vice Chancellor Travis Laster, are responsible for a majority of these outrageous fee awards, and must be reined in so that litigants in Delaware’s courts can have reasonable fee expectations.”
According to the Stanford report, more than 60% of the outsized fee awards can be attributed to decisions made by these two judges. The awards often exceed ten times the base legal fee, with some attorneys receiving adjusted rates of nearly $50,000 per hour. By comparison, no federal court has authorized fees at this level.
The issue has caught the attention of companies and legal professionals across the country, with growing concerns about Delaware’s ability to maintain its reputation as a leader in corporate governance. Citizens for Judicial Fairness argued that the state’s courts have become increasingly misaligned with broader legal standards.
“The pattern is clear,” the group stated. “Corporate insiders and well-connected firms are cashing in while Delaware’s reputation burns. Delaware lawmakers can’t look the other way anymore. These payouts aren’t normal, and they aren’t defensible. They’re part of a system that’s increasingly out of step with every other court in America. It’s time for serious reform – and if Delaware won’t fix it, the market will.”
The group has consistently advocated for greater transparency and reform in Delaware’s legal system, warning that unchecked judicial practices could drive businesses and corporate revenue out of the state. The Stanford study adds new weight to these concerns, emphasizing the need for balance and responsibility in the state’s courts.
With its findings highlighted in The New York Times’ DealBook newsletter, the study has amplified calls for reform as Delaware’s lawmakers and judicial leaders face mounting pressure to act.
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