A US federal judge has approved the landmark $1.5 billion copyright settlement between Anthropic and a class of authors while sharply reducing the legal fees sought by the lawyers who represented them.
US District Judge Araceli Martínez-Olguín awarded class counsel approximately $101.6 million—far below the $187.5 million requested. The lawyers had earlier sought $300 million before scaling back their demand following concerns raised by another judge.
The case centred on allegations that Anthropic used hundreds of thousands of pirated books to train its artificial intelligence models. The company denied wrongdoing. The settlement is regarded as the largest copyright class action settlement in US history.
At the heart of the dispute was how lawyers should be paid in a case involving such a massive settlement. Class-action attorneys may receive a percentage of the recovery or be compensated under the “lodestar” method, which is based on the hours worked and reasonable billing rates, often adjusted through a multiplier.
The attorneys, from Susman Godfrey and Lieff Cabraser, argued that a percentage-based award would better align their interests with those of the authors because their compensation would rise with the amount recovered. They sought 12.5% of the settlement fund.
But the judge concluded that applying that percentage to a $1.5 billion recovery would produce an excessive payout when compared with the work performed and the lawyers’ recorded hours. She determined that the lodestar method was more appropriate.
Even so, the court increased the basic fee calculation through a multiplier. The judge pointed to the unprecedented size of the settlement, the novel legal questions involving artificial intelligence and copyright law, and the significant risk that the attorneys could have ended the litigation without any recovery.
The final award amounted to roughly 6.8% of the settlement fund.
The judge described the litigation as involving complex and largely untested legal issues, with the plaintiffs’ lawyers facing the possibility of losing entirely. She said those risks justified a substantial fee, but not the larger percentage-based award sought by counsel.
The decision also means that tens of millions of dollars will remain available for distribution among members of the author class rather than going toward legal fees.
Anthropic had previously challenged the percentage-based approach, arguing that courts have become increasingly cautious about applying standard percentage benchmarks to so-called “megafund” settlements. The authors’ lawyers, in response, had argued that cutting fees too aggressively could discourage top-tier firms from taking on similarly difficult copyright cases.
The settlement itself was approved, bringing the underlying copyright dispute closer to an end. The ruling, however, leaves behind a broader question that continues to surface in large class actions: how much of a massive recovery should go to the lawyers who secured it—and how much should stay with the people the case was meant to compensate?
