Case Law Regarding Reasonable Attorney’s Fees

Although legal auditors are not engaged in the practice of law, they must be familiar with the case law surrounding reasonable attorney's fees and their opinions should be supported by law.

When auditing legal bills to assess the reasonableness, some of the issues that Accountability Services reviews are:

	Exercise of Billing Judgement
	Billing Methodology
	Reasonableness of Time Expenditures
	Staffing Issues
	Management Style
	Billing Rates

	Other Issues that  Effect Legal Fees, such as     travel time,clerical and administrative tasks,and  internal conferences
	Appropriateness of Disbursements

Set forth below is some of the case law involving exercise of billing judgement and billing methodology. This material is for general information purposes only and it is not offered as legal advice.

Case law for other issues regarding reasonable legal fees will be posted periodically, so please visit our web site again or e-mail us for a list of cases.

Exercise of Billing Judgment

Courts assume that attorneys routinely exercise billing judgment on behalf of their client and expect that same treatment with respect to the legal bills presented to one’s adversary. Hensley v. Eckerhart, infra; Ecos, Inc. v. Brinegan 671 F. Supp. 381 (M.D.M.C. 1987); LeRoy v. City of Houston, 906 F.2d 1068 (5^th Cir. 1990)

"The falsification in any manner of legal bills to clients is unethical and reprehensible. Billing practices, like every other aspect of client dealing, should be conducted in a scrupulously honest manner." Florida Bar v Herzog, 521 So.2d 1118 (Fla. 1988)

Billing Methodology

         Contemporaneous Time Journals

The burden is on counsel to keep and present records from which the court may determine the nature of the work done, the need for it, and the amount of time reasonably required; where adequate contemporaneous records have not been kept, the courts should not award the full amount requested. F.H.Krear & Co. V. Nineteen Named Trustees, 810 F2 1250,1265 (2^nd Cir. 1987)

Courts have held that the absence of detailed contemporaneous time records, except in extraordinary circumstances, will call for a substantial reduction in any award or, in egregious cases, disallowance. Grendel’s Den, Inc. v. Larkin, 749 F. 2d 945 (1^st Cir, 1984)

When the Second Circuits contemporaneous time record requirement is not satisfied, courts have seen fit to adopt a roughly 30% fee reduction rule for an attorney’s failure to keep contemporaneous time records of [his] services. See Ragin, 870 F.Supp at 521 (listing cases).

The court decided that even a 30% reduction in the claimed time may be too generous in light of the vagueness of the law firm’s records. See Bonnie & Co Fashion Inc. v Bankers Trust Co.,970 F. Supp 333 (S.D.N.Y. 1977) at 343.

Any ambiguities arising out of poor time records should be resolved against the applicant. New York State Assoc. For Retarded Children v. Carey, 711 F.2d 1142 (2d Cir. 1983)

"Inconsistencies in the attorney’s records will be cut, for example telephone calls one claims to have made to the other that do not appear in the other’s records." Carrero v. New York City Housing Authority,685 F. Supp. 904, 909 (S.D.N.Y 1988), aff’d in part, rev’d in part on other grounds 890 F. 2d (2d Cir 1989)

         Block Billing

Bankruptcy courts will typically disallow lumped entries. In re The Leonard Jed Company, 103 B.R. 706 (Bankr. D. Md. 1989)

"[When] more than a single service was provided, the services are combined, and there is no information concerning what part of the total charge is allocated to each service.Hercules’ challenge of cleansing the Augean Stabels pales by comparison with the task presented." Mokover v. Neco Enterprises, Inc., 785 F. Supp. 1083 (D.R.I. 1992)

          Large Billing Increments

The practice of billing in quarter hour increments "inherently inflates and distorts the time actually expended, and hence is unacceptable." In re Price, 143 B.R. 190 (Bankr. N.D. Ill 1992)

One court reduced the legal fees awarded by 10% to adjust for overcharging through the use of minimum billing increments of .25 hours. See In re Tom Carter, 55 B.R. 548 (Bankr, C.D. Cal. 1985)

In future reports, we will be exploring :

Case Law regarding Other Aspects of Legal Fees

Fee Application Basics

Judicial Approaches to Calculating a Reasonable
    Attorney Fee: Lodestar or Percentage of Fund  (POF)

Legal Ethics and Attorney's Fees: Some Relevant       
   Opinions and Rules

Please contact us if you would like an advance copy of any of these reports.

Disclaimer: Accountability Services, Inc. is not engaged in the practice of law. We have provided the above materials for general information purposes only and it is not offered as legal advice. For legal advice on specific billing practices, the law of specific jurisdictions and the interpretation and continued validity of the cited cases, please consult your attorney.

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