By Mike Scarcella and David Thomas

July 31 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to D.Thomas@thomsonreuters.com.)

A proposed settlement involving Charles Schwab is giving the federal courts a fresh chance to consider what lawyers deserve to be paid for resolving class actions without securing a settlement fund for class members.

Schwab agreed last year to settle the 2022 proposed class action, which said its 2020 merger with TD Ameritrade’s brokerage businesses decreased broker competition and caused the plaintiffs to make less money from their trading accounts.

Schwab, which denied any wrongdoing, agreed to settle with the plaintiffs by implementing an antitrust compliance program, with no payment fund for about 36 million class members.

Lawyers for the plaintiffs at law firms Bathaee Dunne, Burke LLC and Korein Tillery this month asked the court to award them more than $8 million in legal fees for their work on the case.

A judge in February preliminarily approved the accord, which would still allow individual customers to sue separately to pursue their own damages claims. But with a final fairness hearing set for next month, some objectors are taking aim at the lawyers' fee request.

"Sometimes, a lawsuit — even a class action lawsuit — will not lead to a large recovery. That happens," the Iowa Attorney General's Office told the court in a filing. "But when the class receives a minimal benefit, there should not be an outsized reward for counsel."

Iowa is not a party but filed an objection, it said, to protect its citizens as part of the nationwide accord.

Another challenger, Ted Frank, director of litigation at the Hamilton Lincoln Law Institute and the founder of the Center for Class Action Fairness, in a filing this week said there's nothing wrong with lawyers bringing a good faith lawsuit that doesn't yield a big payout in the end.

"What they are not entitled to do is use the class action device to pay themselves and their attorneys for a meritless class action," Frank's objection said.

In a filing this month, the plaintiffs told the court that their settlement "would provide meaningful injunctive relief to current and future retail investors." They pointed to other injunction-only settlements to argue that the Schwab settlement class members "gave up very little" to obtain the deal.

The plaintiffs' attorneys did not immediately respond to requests for comment.

In a statement, Schwab defended the proposed resolution and said the firm was focused on its business priorities. The company agreed to the fees requested by the plaintiffs, court records show.

Schwab is represented by lawyers from Gibson Dunn and King & Spalding.

-- Prominent law firm Milbank and its partner Neal Katyal are representing Hawaii in a firearms case at the U.S. Supreme Court for free, the state told Reuters.

Katyal is lead counsel for Hawaii, which is defending a state law requiring a person to obtain a property owner's express consent before bringing a gun onto private property that is open to the public.

Katyal took the case for Hawaii while he was at law firm Hogan Lovells. He jumped to Milbank this year, and now leads the firm's appellate and Supreme Court practice.

It is common for big law firms to provide free or reduced-fee legal services to state and local clients in litigation.

Milbank did not immediately respond to a request for comment.

Separately, Milbank and Katyal are charging reduced rates for legal work defending two New Jersey cities in a lawsuit the Trump administration filed over their immigration policies. In that case, Katyal disclosed that he typically otherwise charges a $3,250 hourly rate. Milbank said it was reducing all of its billers' rates in the case to $300 an hour.

Milbank is one of nine firms that reached deals with Trump in March and April, after he began issuing executive orders against law firms that restricted their access to government officials and federal contracting work.

Milbank, which had not been hit with an order, in its deal said it earmarked $100 million in free legal services for mutually agreed-upon initiatives with the White House.

-- Jackson Walker has reached more settlements with ex-clients that are seeking to recover legal fees they paid the law firm in bankruptcy cases before U.S. Bankruptcy Judge David Jones in Houston, whose undisclosed romantic relationship with a Jackson Walker partner sparked an ethics scandal and cast uncertainty over the firm's fees in dozens of cases.

Five proposed settlements totaling more than $2.3 million are now pending before U.S. District Judge Alia Moses, who is overseeing a legal effort by the U.S. Trustee, the U.S. Justice Department's bankruptcy watchdog, to force Jackson Walker to disgorge all of the fees it was awarded by Jones.

The trustee has opposed Jackson Walker's prior efforts to reach individual settlements with its former clients, as the deals would allow the firm to retain part of the fees Jones awarded.

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(Reporting by Mike Scarcella)

((Mike.Scarcella@thomsonreuters.com;))