In a typical securities class action case, the plaintiff's attorneys (the lawyers representing the class of injured people) will be paid out of the settlement fund, if any, should the plaintiffs win the case. Defense attorneys, as in most legal situations, are paid by the defendant(s) personally, unless the defendants choose to use public defenders (which are not available for civil suits). In a securities class action suit against a company, the defense attorneys will ordinarily be professionals employed by the company on an official basis and paid by them according to the terms of employment contracts.
Most commonly, prosecuting attorneys in securities class action cases will work on a contingency fee basis, meaning they will not receive payment unless the case is won. In the event that the case is won, the court will award them a percentage of the total settlement as pay for their services.
The percentage that the attorneys receive in a securities class action case varies, but may be anywhere from 10% to 30% depending on the complexity of the case, number of plaintiffs, and other factors that are determined on a case-by-case basis. If a case settles outside of court, then the attorneys may sometimes negotiate their own fee payment with the defense lawyers and/or with the clients who they are representing.
If a securities class action case goes to trial and is decided by a jury verdict, or when a judge signs off on a class action settlement, the court may also play a role in determining exactly how much money the attorneys are entitled to. This is done through the submission of a "fee petition" by the attorneys which details the work done. The court will review the fee petition to determine an appropriate amount of compensation.
Typically such arrangements as these will be made long before the securities class action case goes to trial, and all plaintiffs involved must be made aware of the attorney fees and sign an agreement stating as such before proceedings move forward.