
Case Law Regarding Reasonable Attorneys 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:
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. 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 ones 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 (5th 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)
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 (2nd 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. Grendels Den, Inc. v. Larkin, 749 F. 2d 945 (1st 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 attorneys 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 firms 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 attorneys records will be cut, for example telephone calls one claims to have made to the other that do not appear in the others records." Carrero v. New York City Housing Authority,685 F. Supp. 904, 909 (S.D.N.Y 1988), affd in part, revd in part on other grounds 890 F. 2d (2d Cir 1989)
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)
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 :
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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