What Class Action Attorneys Do and How They Get Paid

Class action attorneys are lawyers who represent an entire group of people with the same legal claim against the same defendant in a single lawsuit, rather than handling each person’s case separately. They investigate the claim, file the complaint, persuade a court to certify the class, run discovery, and negotiate a settlement or try the case on behalf of everyone in the group. They work on contingency: no one in the class pays them out of pocket, and their fee — typically 25% to 35% of the recovery — comes out of the settlement or judgment only if the case succeeds, and only after a judge approves the amount.¹

That short answer hides a lot of complexity. The person these lawyers represent is not really a single client at all. It is a group that may number in the thousands or millions, most of whom the lawyer will never meet, and the rules governing that relationship are different in important ways from ordinary legal work.

Who the Lawyer Actually Represents

A class action is a civil lawsuit in which one or more people sue on behalf of a larger group harmed in the same way by the same entity.² The concept exists because many wrongs, taken individually, are too small to justify suing over. A bank that overcharges each customer by $30 wrongs millions of people, but no single customer would spend tens of thousands of dollars on a lawsuit to recover it. Bundling the claims lets the group hold the defendant accountable collectively.³

One or more people, called class representatives, stand in for the whole group and lend their names and stories to the case. Everyone else — the “absent” class members — is bound by whatever happens unless they formally opt out after receiving notice. So when a class action attorney talks about “the client,” they mean the class as a whole, not the person whose name appears on the complaint.

Fiduciary Duty to the Class, Not the Named Plaintiff

Class counsel owes a fiduciary duty to the class as a whole. A formal ethics opinion from the New York City Bar Association puts it directly: the lawyer must “seek the best interests of the class” even when individual members or the named plaintiffs disagree with particular strategic decisions. Because most class members cannot practically monitor the litigation, the court itself serves as a check on counsel’s conduct, and attorneys are expected to disclose fee arrangements, settlement terms, and any internal disagreements within the class.⁴

This departs sharply from ordinary representation. In a typical case, the client decides whether to settle. In a class action, the lawyer exercises substantial discretion over that question, and is generally not required to withdraw when the named plaintiff disagrees, so long as the lawyer acts in the class’s best interest and keeps the court informed.⁴

That structure also creates built-in tensions that scholars have flagged repeatedly. A named plaintiff may hold out against a settlement counsel considers good for the class, or sell out the group in exchange for a personal payment, or demand an unjustified individual payout.⁵ There is also a fee-driven pull: because fees come from the total recovery, lawyers may have an incentive to settle earlier than full litigation would warrant.⁶ Individual class members generally cannot sue class counsel for malpractice, because they are not considered clients in the traditional sense, which is part of why judicial oversight of fees and settlement terms matters so much.⁷

What Class Action Attorneys Do

The work starts well before the complaint is filed. Counsel identifies potential claims, locates affected people, and evaluates whether the case can meet the strict legal requirements for proceeding as a class. From there, they file the complaint, manage the certification fight, run discovery, and steer the case toward settlement or trial.⁸ None of this is fast. In federal court, the median time to class certification is roughly 740 days, and the median time to settlement is about 979 days.⁹

How a Lawyer Becomes Class Counsel

Courts formally appoint class counsel under Federal Rule of Civil Procedure 23(g). Judges weigh the lawyer’s investigation work on the case, experience with complex litigation, knowledge of the relevant law, and the resources the firm can commit. When several firms compete for the role, the court must appoint whichever applicant is “best able to represent the interests of the class.”¹⁰ The selection has been described as “more art than science,” since judges assess not only credentials but qualities like candor, credibility, and the ability to cooperate with the court and opposing counsel.¹¹

Winning Class Certification

The pivotal moment in almost every class action is certification: the court’s ruling that the case can proceed on behalf of the group at all. Under Rule 23(a), the plaintiffs must satisfy four requirements:¹⁰

Numerosity: the class is large enough that joining each member individually would be impractical.
Commonality: the members’ claims share common questions of law or fact. After Wal-Mart Stores, Inc. v. Dukes (2011), that means showing the case will produce common answers capable of resolving the litigation in one stroke.
Typicality: the named plaintiff’s claims are not fundamentally different from the rest of the class’s.
Adequacy: the representatives and their lawyers will fairly and adequately protect the class’s interests.

Plaintiffs also must fit into one of the categories under Rule 23(b). The most common for money-damages cases is Rule 23(b)(3), which requires common questions to “predominate” over individual ones and that a class action be superior to other ways of resolving the dispute.¹⁰ Plaintiffs won certification at a rate of about 72% from 2021 to 2023, and judges granted over 68% of certification motions in 2025.¹²

Notice, Opt-Outs, and Settlement

Once a class is certified under Rule 23(b)(3), the court must order notice sent to all identifiable class members using the best means practicable, including mail, email, and other media.¹⁰ The notice must be in plain language and explain the case, who is included, the right to opt out, and the binding effect of any judgment. Opt-out windows typically run 45 to 60 days.¹³ Anyone who does not opt out is bound by the outcome. The Supreme Court held in Phillips Petroleum Co. v. Shutts (1985) that this binding effect is constitutionally permissible only because absent members get notice and the chance to exclude themselves.¹⁴

Most class actions never reach trial. Roughly 94% resolve through settlement or procedural disposition.⁹ Any proposed settlement must be approved by the court after a fairness hearing at which class members can object. The court evaluates whether the deal is “fair, reasonable, and adequate,” weighing the risks of continued litigation, the effectiveness of the distribution plan, and the terms of attorney fees.¹⁰ After approval, claims administrators handle distribution; most settlements require class members to submit a claim form through a dedicated website, though some pay out automatically through credits or similar means.¹⁵

How Class Action Attorneys Get Paid

Class action lawyers work on contingency. They advance all the litigation costs — expert witnesses, deposition expenses, document review, filing fees — and collect only if the case produces a recovery, at which point their fee comes out of the settlement fund before distributions go to class members.¹ Individual class members are never billed separately. If you are part of a class, you do not write a check to the lawyer, and you do not owe anything if the case loses.

The Two Methods Courts Use to Calculate Fees

The percentage-of-fund method awards attorneys a fixed share of the total recovery. Many courts start from a presumptive benchmark of 25%, though actual awards typically land between 25% and 35%.¹ In marketplace data, including cases brought by sophisticated corporate clients, fees average around 33%. The percentage can run higher in especially complex cases and is sometimes reduced by courts when recoveries exceed $100 million.⁶

The lodestar method works differently. It multiplies the number of hours the attorneys actually worked by their billing rate. Some courts use the lodestar as a cross-check against a percentage award to confirm the fees are reasonable rather than a windfall.

Whichever method a court uses, every proposed fee must be approved by the judge before the case is finalized, and judges can and do reject fees they find unfair or disproportionate to the result obtained.¹ Administrative costs — the expenses of notifying class members and processing claims — are also deducted from the gross fund before class members get their share.¹⁶

What Class Members Actually Receive

The practical arithmetic for a class member looks like this: the gross settlement fund is reduced by attorney fees, administration costs, and any service award to the named plaintiffs. What remains is divided among the people who filed valid claims. In some settlements, money left unclaimed after the deadline is redistributed to the claimants who did file; in others, it reverts to the defendant or goes to a charity under a “cy pres” award.¹⁵

Class Action vs. Mass Tort

People often confuse class actions with mass torts, and the difference changes what the attorney actually does for you. In a class action, the group is treated as a single legal entity: one jury hears the case, one verdict or settlement covers everyone, and individual members generally receive comparable payouts under a common formula. In a mass tort, each plaintiff keeps a separate case, retains their own attorney, and can receive an individual settlement based on their specific injuries.¹⁷

Mass torts are the preferred vehicle when individual circumstances vary too much for class treatment. Defective-drug cases often involve different injuries, dosages, and medical histories for each plaintiff, which makes a unified class impractical.¹⁸ These cases are often consolidated through Multidistrict Litigation, which centralizes pretrial proceedings before a single federal judge while preserving each plaintiff’s individual claim.¹⁹ If a lawyer tells you “you’ll get your own settlement based on your injuries,” you are likely in a mass tort, not a class action.

Choosing a Class Action Attorney

If you are considering joining a case or evaluating a firm, a few things actually matter.

Experience with the specific type of case. General litigation credentials are not enough. The procedural hurdles and substantive law vary significantly between a securities fraud case, a consumer data-breach case, an antitrust case, and a wage-and-hour case. A firm that files frequently in the relevant area has seen the issues before.

A track record of winning certification. A case that never gets certified never produces a recovery. The firm’s history of surviving the Rule 23 battle is a meaningful signal.

Resources. Class actions are expensive to prosecute, often requiring years of discovery, expert witnesses, and millions of dollars in upfront costs before any fee is earned. Firms without that financial capacity may settle early or cut corners on case development. Judges weigh resources heavily when appointing class counsel for the same reason.¹⁰

Communication. These cases move slowly. A firm that provides regular, plain updates about where the litigation stands reduces the frustration of a process that can otherwise feel opaque.⁸

The fee. Because class action attorneys work on contingency, you will not owe money out of pocket. The useful question is what share of the recovery the firm will seek and what expenses will come off the top before class members are paid. The answer is not final until a judge signs off.¹

The last point is the one worth holding onto. Whatever a class action attorney promises about strategy or outcome, the court has the final word on both the settlement and the fee. That oversight is the structural protection built into the system for a client — the class — that cannot practically protect itself.

1
Super Lawyers. Do I Pay the Attorneys as a Member of a Class Action
2
U.S. Courts. Class Action
3
Harvard Law School. Litigation and Class Action
4
New York City Bar Association. Formal Opinion 2004-01: Lawyers in Class Actions
5
Florida Law Review. Ethical Duties of Class Counsel Also Representing Class Representatives
6
Fordham Law Review. An Empirical Study of Class Action Fee Awards
7
Duke University School of Law. Class Action Ethics
8
LawInfo. What to Expect From Your Class Action Lawyer
9
Milberg. Most Active Class Action Law Firms
10
Cornell Law Institute. Federal Rules of Civil Procedure, Rule 23
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Duke University School of Law. Guidance on New Rule 23 Class Action Settlement Provisions
12
CFO Dive. Top U.S. Class Action Settlements Hit Record $79B
13
Bloomberg Law. Objectors and Opt-Outs in Class Actions
14
Columbia Law Review. Due Process and Class Action Opt-Out Rights
15
ClassAction.org. What Happens When a Lawsuit Settles
16
FRS Co. Class Action Players
17
Super Lawyers. Class Action and Mass Torts
18
Searcy Law. Mass Tort vs. Class Action
19
Cory Watson Attorneys. Class Action vs. Mass Tort