A class-action lawsuit over the collapse of Enron could produce the first billion-dollar award of attorneys’ fees in the history of American securities litigation.

The renowned plaintiff’s attorney pursuing the case, William Lerach of San Diego, has already won settlements of $7.2 billion from banks and investment firms accused of contributing to fraud carried out by Enron executives, two of whom were convicted on criminal charges last week by a Houston jury.

Settlements or trial verdicts against other brokerages and banks caught up in the case, such as Merrill Lynch & Co. and Barclays PLC, could push the recovery into the $10 billion range. Under a contingency-fee agreement with the lead plaintiff in the case, the University of California, a fund of that size would entitle Mr. Lerach’s law firm, Lerach Coughlin Stoia Geller Rudman & Robbins LLP, to roughly $1 billion.

“You get talking about legal fees of $1 billion, you get people’s attention,” a law professor at St. John’s University, Michael Perino, said. “In terms of securities class actions, I think that’s the largest fee I’ve ever heard of.”

The deal reached with the university in 2002 entitles Mr. Lerach’s firm to 8% of the first billion dollars recovered, 9% of the second billion, and 10% of all amounts above $2 billion. That works out to $690 million, so far, with more defendants likely to settle in advance of a trial set for Houston in October.

Under federal law, a judge would have to approve any fee award in the case. However, legal experts said courts generally defer to fee deals worked out between large institutional plaintiffs and their attorneys. “It is quite possible that the court could award fees consistent with the fee arrangement,” Mr. Perino said. “Even if it means nigh on a billion dollars.”

An award of that magnitude would be a remarkable personal coup for Mr. Lerach, who split two years ago with a longtime law partner, Melvyn Weiss of New York. In the divorce-like breakup of the Milberg Weiss firm, Mr. Lerach took the Enron case, filed in 2001, and dozens of lawyers. Mr. Weiss kept the firm’s name and, along with it, an unusual legal problem, an ongoing criminal investigation into alleged illegal payments to plaintiffs in Milberg Weiss lawsuits.

Earlier this month, Milberg Weiss Bershad & Schulman was indicted on federal conspiracy charges, along with two of the name partners at the firm, David Bershad and Steven Schulman. Neither Mr. Weiss nor Mr. Lerach were indicted, but attorneys for witnesses in the case said prosecutors were eager to make a case against both men. All have denied wrongdoing.

Prosecutors have hinted at further indictments, but for the moment Mr. Lerach appears to have gotten the better of the Milberg divorce, taking the lucrative Enron case while Mr. Weiss struggles to hold his firm together in the wake of the indictment. It is not known whether any portion of the Enron fee might flow back to Milberg Weiss.

Mr. Lerach did not return a call seeking comment for this article.

An attorney for the University of California, Christopher Patti, defended the deal with Milberg Weiss as fair based on what was known at the time about the likely value of the case. “We negotiated a fee we thought was quite reasonable and that would create incentives to get the class the best recovery,” he said. “I don’t think people can really argue with the outcome that it’s produced.”

A law passed in 1996 over President Clinton’s veto, the Private Securities Litigation Reform Act, gave large institutional investors like pension funds more influence over the selection of attorneys in securities cases. In the Enron case, the university teamed with Milberg Weiss to seek the lead plaintiff’s role. The school claimed that its endowment and pension funds lost $144 million on Enron securities. While the university tallied the largest single loss, other pension funds, including those of New York City, teamed up with rival law firms to try to take control of the Enron litigation.

“We were kind of throwing dirt at each other,” a Texas attorney who battled Milberg Weiss in the case, Thomas Cunningham, recalled yesterday. He expressed some displeasure at losing out, but said Mr. Lerach has done an impressive job at recouping the estimated $40 billion in value wiped out by Enron’s demise. “It’s a fraction, unfortunately, of what people were owed, but he is getting people to pay big bucks,” he said.

Judge Melinda Harmon awarded the lead status to the university because it was the individual plaintiff with the largest losses. In so doing, she saw the then-secret fee agreement with Milberg Weiss, though she did not formally approve it.

Mr. Perino said the escalating percentage for the fee is consistent with economists’ suggestions that attorneys should be given a strong incentive to seek a maximum recovery for the class. “The increasing percentage theory says basically that the last dollars are the hardest dollars to get,” he said.

However, the professor said the method may not be appropriate for sums as large as those in the Enron case. “Even at 8% of $2 billion, you’re talking about a large amount. It’s unclear to me on the margin that 1% or 2% would make much difference,” he said.

A professor at Cardozo Law School at Yeshiva University, Lester Brickman, said he was troubled that the university did not formally solicit proposals from a variety of law firms before making a selection. “It would be expected of them to engage in some competitive bidding, though in the final analysis the firm’s reputation is one of the most significant factors in the competition,” he said.

The connection with Mr. Lerach was made through a former university treasurer, David Russ, who saw a presentation the trial lawyer gave about Enron at an investors’ conference, Mr. Patti said. Mr. Patti said his office gave “some thought to the alternative firms,” but did not consider putting the case out to bid. “We don’t usually go through that sort of process,” he said. He noted that the university did not want to front any money for the case and few firms other than Milberg Weiss had the deep financial pockets to take it on. “The resources they have put in have been unmatched as far as I know in any securities case,” Mr. Patti said.

A critic of class action litigation, Lawrence Schonbrun, said he is suspicious of the university’s claims that it has vigilantly overseen the Enron case. A retired judge the university hired as a consultant on the case, J. Lawrence Irving, was paid more than $1.4 million by the state school, before being hired this month as a consultant by Lerach Coughlin. “This was not the ideal choice to monitor plaintiffs’ counsel,” Mr. Schonbrun said.

At $1 billion, if the Lerach firm dedicated 20 lawyers to work 40 hours a week, 50 weeks a year for four years, the fee would work out to an hourly billing rate of $6,250 an hour. Fees for non-plaintiff’s lawyers generally max out at close to $1,000 an hour.