CASE LAW REGARDING 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
Judgment
*
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 judgment
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 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 (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)
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 (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. Grendel’s 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 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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