In a WSJ blog report, "Trump Claiming He Has Ph.D. in Legal Fees Dukes it Out With Lawyers" Donald Trump claims to have specialized expertise on attorney fees.  "I have dealt with a lot of lawyers and paid a lot of legal fees, Donald Trump told the NYLJ.  "I have a Ph.D. in legal fees. I know when fees are fair and when they are not."  In 2007, Donald Trump filed a legal malpractice lawsuit against Morrison Cohen's David Scharf claiming his former counsel treated him like a "cash cow" performing unnecessary work to generate higher legal bills in a lawsuit against a golf course contractor.

A recent article, "Small Illinois Law Firm Reap $16 M in United Airlines Case" reports Myron M. Cherry & Associates of Chicago will get the lion's share of the $44 million settlement that resulted from a lawsuit brought by United Airline pilots who claimed they were shortchanged by their union in a distribution of pension benefits related to the airline's bankruptcy. Cherry's firm will rake in $9.8 million as class counsel and Korein Tillery, a St. Louis-based firm, will take home $6.6 million for chipping in over three years. The article reports, "Cherry's firm had two full-time lawyers and three part-time attorneys on the case, while Korein Tillery assigned one full-time lawyer and three occasional attorneys." The lawsuit was originally filed in federal court in December 2006.

Courthouse News Service reports in "Tyson Damages Capped at $5 Million and Fees" that Judge Richard D. Bennett repeatedly expressed concerns about the $3 million plaintiffs attorneys' fees and court costs that could be paid by Tyson Foods under the terms of the settlement. Bennett said he would be hard-pressed to sign off on what he called such a disproportionate scale, with the plaintiffs' counsel set to get about 37.5 percent of the overall settlement total, while thousands of consumers net refunds capped at $50.  Tyson Foods was accused with falsely advertising that its chickens are raised without antibiotics.

Daniel C. Girard of Girard Gibbs LLP in San Francisco was one of five attorneys listed as representing the plaintiffs in the case, argued that the attorneys did more work per hour than what they settled for with the defendants, and that it will be documented through time slips and other record-keeping methods.  A fairness hearing is set for May 7 to determine attorney fees.

Drinker Biddle & Reath has won a hard-fought $1.78 million fee award from a Pennsylvania state court jury in a bet-the-company patent litigation case. A recent article, "Drinker Biddle Wins $1.78 M Bill Battle; Firm Clocked 5,225 Hours in 3 Months" reports that AgriZap Inc. retained Drinker Biddle & Reath in 2006 to handle a patent dispute concerning its "Rat Zapper" and struck an unusual fee deal with the law firm. If the AgriZap lost, it would have 18 months to pay the Drinker Biddle legal bill. And if the case was a trial winner, the law firm would get triple its legal fees, plus costs.

After AgriZap won a $2.7 million jury verdict, Drinker Biddle's $5 million legal bill arrived. The article reports, "Under the fee agreement, the law firm was apparently entitled to payment of triple its hourly charges regardless of how much the client won at trial. The court upheld the fee agreement, and the jury awarded Drinker Biddle exactly what it sought. However, it appears that the bill battle could be revving up for at least another round or two. In post-trial relief, AgriZap is contending, among other arguments, that the law firm breached its fiduciary duty by entering into an unfair fee agreement and that the jury was not properly instructed to consider the reasonableness of the amount sought".

A recent article, "Chicago Firm Sues Client Over $747,500 in Fees" reports that Chicago-based Freeborn & Peters has sued its former client, Vehicle Safety & Compliance LLC of Memphis to collect $747,515 in unpaid legal fees plus interest and the cost of bringing the lawsuit. Freeborn & Peters alleges that it worked out agreements in December 2008 and January and March 2009 with the client for payment of the fees, but the client still fell short after making good on a portion of the charges.

The article reports, "The fees owed to Freeborn & Peters stem from defending Vehicle Safety and the related entities in a 2008 lawsuit brought in the Chicago federal court by DigaComm LLC, which was seeking "not less than $200 million" in damages.  Brad Larschan, chief executive of Vehicle Safety, said his transportation safety technology company hadn't yet been served with the lawsuit, but the last he heard his company had paid between 70% and 75% of the fees and the two parties were in discussion to resolve the matter."

Ever wonder about the meaning of "prevailing party" under Section 502 (g) of ERISA? If so, you are in luck. The U.S. Supreme Court is about to take up this issue, perhaps as soon as April, in Hardt v. Reliance Standard Life Insurance Co. The issues include:

1. Whether ERISA § 502(g)(1) provides a district court with discretion to award reasonable attorney's fees only to a prevailing party; and

2. Whether a party is entitled to attorney's fees pursuant to § 502(g) (1) when she persuades a district court that a violation of ERISA has occurred, successfully secures a judicially ordered remand requiring a redetermination of entitlement to benefits, and subsequently receives the benefits sought on remand.

For more information visit the SCOTUS Blog.

An article, "Timeliness of Motion for Attorney Fees in the Federal Courts of Appeal: The Benefits of a Uniform Rule" by Phineas E. Leahey of Jones Day in New York surveys the differing approaches by federal circuits for a motion for attorney fees for appellate work. The article proposes the adoption of a uniform rule or at least additional local rules as the preferred solution. The article concludes, "The adoption of a uniform time period of reasonable length in a rule of appellate procedure - or alternatively the adoption of an appropriate local rule by circuit courts that do not currently have one - would eliminate uncertainty, promote fairness and finality, and prevent disputes and inconsistent results on whether a particular filing should be deemed timely under the more flexible principles of equity."

A recent article, "Simple Collections Case Balloons, Leading to $ 2.3 Million in Attorney Fees" reports that Massachusetts federal judge Rya Zobel awarded Computer Sales International Inc. (CSI) more than $2.3 million in attorney fees and about $479,000 in litigation costs for a case that began as a "simple claim" to collect $300,000. The article reports, "Zobel's January 7 order in Computer Sales International Inc. v. Lycos Inc. requires Lycos, an internet service company, to reimburse computer-leasing company CSI. Zobel's three page order awarded CSI $2,340,717 in fees and $479,720 in costs. CSI was represented by McCarter & English and McDermott Will & Emery represented Lycos in the case."

Courthouse News Service reports in "Judge OK's $12 Million Retailer Settlement" that a federal judge in Manhattan has approved a $12 million settlement of a securities fraud class action against directors of The Children's Place, but called the request for $3.24 million in attorney fees "excessive." After two years of litigation, The Children's Place agreed to settle the shareholder class action for $12 million, or $10 to $11.71 per share for each claimant. U.S. District Judge Shira Scheindlin called that amount "fair, reasonable and adequate."  But Scheindlin was less receptive to class counsel's request for 27 percent of the settlement in attorney fees, saying $1.8 million was "more than adequate to compensate class counsel for its effort and reward class counsel for the risk it undertook in litigating the case."

A recent article, "Former Partner gets Second Shot at Sonnenschein in Fees Dispute" reports that former Sonnenschein Nath partner Douglas Rosenthal, now at Constantine Cannon in Washington, DC will get a second shot at litigating damages in a compensation battle against his old firm. The article reports, "The District of Columbia Court of Appeals has granted Rosenthal a new trial for a portion of what he claims the firm owes him for generating about $18 million in fees while representing clients suing the Libyan government for the terrorist bombing of a Pam Am jet over Lockerbie, Scotland in 1988."

The article continues, "Rosenthal turned to the appeals court last year after a D.C. Superior Court judge slashed his $3.7 million jury award to just $65,639. In an unusual step, the appeals court also offered Rosenthal the option of accepting the jury's original decision for some of those fees - without the trial judge's reductions - and moving on. It noted that although Rosenthal has not argued for such an option, it would give him the choice since a failure to do so would be "a gross mismanagement of the resources of a busy trial court."

The central holding in Worley v. Storage USA, Inc, et al. is that the trial court was required to calculate reasonable attorney fees using the lodestar approach, given that no common fund was created in the underlying class action. NALFA has requested the publication of this decision in a California Appellate Court. In an amicus letter to the California Court of Appeal, NALFA panelist Aashih Y. Desai of Mower, Carreon & Desai, LLP in Irvine, California, writes, "It is especially worthy of publication because the Court engaged in a meaningful analysis of the factors used to determine a "reasonable fee" under the lodestar methodology."

Desai continues, "If published, this would be one of the first cases to analyze when trial courts should utilize the lodestar approach, as opposed to the common fund analysis, to determine contested fees in the class action context." "In Worley, this Court thoroughly examined the trial court's deductions for "overlitigating" the case but faulted the court for not quantifying the specific instances of excess work. Worley correctly announces that trial courts may not simply toss out the lodestar method altogether whenever they feel it would be unjust."

A recent article, An Increase in Hourly Rates? Get Ready for a Fight in Corporate Counsel sees a fight looming over 2010 hourly rates. In the article, "Susan Blount, the general counsel of Prudential Financial sent a letter to 60 law firms the insurance giant uses regularly. The letter addressed the general economy and the need to cut costs, but one announcement stuck out: Prudential informed the firms that in calendar year 2010, the company expected to pay for legal services at 2008 hourly rates. It wasn't a request as much as a take it or leave it deal, Blount says."

"How hard will the law firms fight? Are they willing to lose client business in order to take a stand on rates? Paul Hurd, general counsel of Daimler Trucks North America, says only "a couple of the firms Diamler Trucks uses parted ways with the company over last year's rate cuts. Blount says none of the 60 firms Prudential contracts with have said "no thanks" yet, though she says she is receiving letters from firms explaining why the proposed cuts shouldn't apply to them. "They are detailing why they are special", she says. But she is ready to defend the cuts. "We find ourselves at an economic crossroads in 2009," she says. "We have a special obligation to the company to be smart purchasers of legal services. We're not trying to undermine the economics of law firms. We are looking for the right way to get high quality work for our company at a reasonable price."

The Laffey Matrix is a fee schedule used by some U.S. Courts, particularly in the Washington, DC area, for determining hourly rates for attorneys. CLICK HERE to view the fee schedule or to learn more about the Laffey Matrix calculations visit www.laffeymatrix.com.

To maximize the chances of success of a motion to obtain attorney's fees in the requested amount, the prevailing attorney always should present the following six basic supporting documents. The local jurisdiction may require others. However, even if not required, to maximize your chances of receiving the attorney fee award you want, always submit the following six basic supporting documents:

• Time Records
• Fee Agreement
• Biographies of the Attorneys and Legal Assistants
• Evidence of the Prevailing, Customary or Market, Hourly Rate
• Factual Background and Opinion Given by a Primary Billing Attorney
• Opinion of an Expert Witness

Source: Leonard Bucklin, Attorney Fee Awards

Before agreeing to pay or reimburse an insured for defense costs incurred by it, the carrier is advised to look for a number of indices that typically portend unreasonable defense costs. These indices are often referred to as the "red flags" of excessive billing and include the enumerated items set out below:

•  Insufficient Detail/Vague Time Entries
•  Undisclosed Timekeepers
•  Block Billing
•  Minimum or Formula Time Charges
•  Unusual Number of Long Days
•  Multiple Billers/Duplication of Effort
•  Inefficient Staffing/Improper Delegation

Source: The Insurance Handbook On Insured-Selected Independent Counsel, Meckler Bulger Tilson Marick & Pearson

"Lay persons are not able to adjudicate the matter of reasonable attorney fee without the testimonial opinion of an expert. Even where a judge is the finder of fact of a reasonable fee, don't rely on the judge's expertise. The prevailing party, and the defending party, should make expert opinion available to the fact-finder.

An expert opinion needs to show the facts upon which the opinion is based. This factual description should start with a narrative of the nature of the case and the progression of events, including the number of hours spent, why and how various attorneys or legal assistants were used, and the hourly rates of attorneys and legal assistants. Then this opinion should summarize the factual consideratsions in all the factors that might involved in upward or downward adjustments to the fee from a lodestar amount. If the determination of the amount is to be by the court and it is ordered and stipulated to be on documentary evidence only, this factual description and the opinion can be a written affidavit. Otherwise, if the presentation is to a jury or with live testimony to a judge, oral testimony should be used."

Source: Leonard Bucklin, Attorney Fee Awards

In a recent interview, "Contolling Litigation Costs", Brad Wright, Practice Manager for the Risk Management and Product Liability practice group at Roetzel and Andress discusses the need to get counsel involved at the earliest stages of a crisis. Brad explains, "The first 48 hours after a castastropic incident are the most ctitical for ensuring that all bases are covered from the standpoint of the company."

Brad continues, "Many large companies throughout the country are requiring that litigation budgets be set and reviews be scheduled with their attorneys at the early stages of the matter. This allows the client to fully understand what costs will be associated with that type of litigation or what alternate approaches may be considered. This allows clients - in conjuction with their attorneys - the opportunity to determine what course of action they want to pursue on the matter. Many companies have begun to participate in pre-litigation mediation and other alternative dispute resolution that reduce litgation costs and still resolve their matters."

The San Franciso Attorney Fee Dispute Program Course Book is still available. The course book covers a host of subjects on attorney fees and legal billing including:

•  The Fee Expert & The Fee Dispute Case
•  Attorney Fees in Insurance Coverage Litigation
•  Reasonable Fees in Cumis Counsel Situations
•  California's Mandatory Fee Arbitration Program

This course book is a must have for an attorney interested in attorney fee and legal billing information.

CLICK HERE for course book order form. 

A recent article, "Fortune 500: The Total Cost of Litigation Estimated at One-Third Profits", estimates that litigation cuts into profits by one-third for Fortune 500 Companies. The article states, "Fortune 500 corporations spend an average of three years to resolve litigation. This is true across practice areas. In general, Fortune 500 corporations employ a delayed resolution business model for litigation. Fortune 500 corporations increase total cost by delaying case resolution. They prepare each case as if it were going to trial, but end up settling to avoid trial, only tying 3% of cases."

The article continues, "Incentives drive delayed resolution. Paying outside counsel by the hour encourages more hours. Engaging in exhaustive discovery and aggressive motion practice increases the time it takes to resolve the litigation."

An article, "Attorney Fees Under Fire", in Minnesota Lawyer discusses proposed legislation that has riled plaintiffs' attorneys. The bill would require that where a statute provides for the award of attorney fees to a successful litigant, judges must take into account the reasonableness of the fees sought in relation to the amount of damages awarded to the prevailing party. The bill also contains a provision mandating that if a plaintiff claiming an award of attorney fees rejected Rule 68 offer of a judgment and failed to obtain a verdict in excess of the offer, the plaintiff will not get fees after the date of the offer.

Opponents of the bill are concerned it will cause attorneys to refuse cases where the amount in dispute is minimal, like some landlord-tenant matters or debt collection cases. Minneapolis civil rights attorney Justin Cummins said, "It's going to be much more difficult to get the private bar involved if attorney fees are contingent on actual damages awarded." He added, "It would really create a disincentive for the private bar to come forward with public interest cases."

In an article, Andrew F. Halaby of Snell & Wilmer in Phoenix explores the issues and factors that affect decision making in breach of contract lawsuits in terms of attorneys' fees. His article, "Arizona's Fee-Shifting Statute for Contract Cases May Make a Big Difference in Resolving Your Business Disputes" concludes, "Keep in mind that, should your dispute ripen into a real lawsuit, some version of your lawyer's billing statements almost certainly will have to be submitted to the opposing party and the court in connection with any fee application down the road. Your lawyer should assume that the opposing party will seize on any glitch in the presentation of work done, or time spend to argue that some or all of the fee request is not "reasonable".

In an article in Plaintiff Magazine, Mary Katherine Bedard of Lopez, Hodes, Restaino, Milman & Skikos in San Francisco explores the issues and principles of attorney fee awards in common fund cases. Her article, "Attorney Fee Awards and the Common Fund Doctrine: Hands in the Plaintiffs' Pocket?" concludes, "With the expansion of the common fund doctrine has come the diminishment of ethical and statutory requirements governing recovery of attorney's costs and fees. While the law of restitution allows for counsel to recover the cost of securing a successful resolution, it does not permit counsel to be unjustly enriched at the expense of the client."

 In the March 2008 edition of the ABA Journal, Let's Be Reasonable reviews the large body of law and opinion on fee agreements. The article concludes, "Even though ABA Model Rule 1.5 generally doesn't require written fee agreements, lawyers are much better situated to meet the rule's reasonableness standard when they have entered into a written, fully informed fee agreements with their clients at the inception of representation. But lawyers also must assure that fees (along with expenses) are inherently reasonable within the context of the representation. And lawyers should think twice before charging clients for fees associated with withdrawing from the representation, resolving fee disputes or responding to disciplinary complaints."

NALFA is now on Facebook and Linkedin. On-line professional networking is an excellent way to build your practice and gain more knowledge in a specialized practice area such as attorney fees and legal billing. If you're interested in learning more about reasonable attorney fees and proper legal billing practices and networking with other professionals in the field, join our groups on LinkedIn and Facebook. See you on-line!

Consider the Attorney's Experience: Is he or she an associates or a 10-year partner?

Consider the Attorney's Abilities: This is separate from experience. Some 10-year veterans may really be a 1-year veteran, 10 times over.

Look at the Type of Cases: Auto first party cases take considerably less handling time than serious business interruption losses.

Examine the Support Staff Available to the Lawyer: Do the attorneys have to do their own photocopying, etc.?

Look at the Number of Plaintiffs: Cases involving multiple plaintiffs generally take much greater handling.

The NALFA News Blog is back after taking a brief summer hiatus. We look forward to writing more blog entries that address news, articles, and happenings in the attorney fee and legal billing profession and promoting our Network Directory as the nation's most qualified attorney fee and legal billing professionals.

General Experience Level of Attorney Handling the Account
Beware if your cases are handled largely by neophytes and new associates. Young attorneys may need to learn on the job and cut their teeth on some files, but should it be on your account?

Caseload Size of the Attorneys Handling the Account, on a Per-Lawyer Basis
Even the best attorneys are not going to be able to do a good job if they are loaded down with 200 cases. No one can quantify with precision the optimum caseload size. Each client has to assess that individually.

The Percentage of Your Files Compared to the Attorney's Entire Case Load
If your cases are only 5 percent of any attorney's caseload, do not expect to carry a lot of clout. There are advantages to being a big fish in a small pond.

The Attorney Turnover Rate During the Past Year or Two
A revolving door saps continuity, impairs the quality of file-handling and makes it harder for lawyers to really follow your account instructions.

The Frequency with Which Partner Reviews the Assoicates' Files
At a minimum, this should be done monthly. With new lawyers, every week or every other week may be appropriate. Are there written records of these reviews? Can the auditor see them? The auditor is not looking to review an attorney's appraisal or personnel file. This would be an invasion of privacy.

Some observes have divided law firms into finders, minders, and grinders.

Finders are the marketeers and rainmakers, usually the top partners who go out and drum up new business. Marketing and business production are essential skills at this level.

Minders are the less senior partners who "mind the store" and who tend to the administrative minutiae of running a modern law practice-e.g., deciding what kind of computer system to buy, what periodicals to stock in the law library, assigning clerks and paralegals among existing staff, etc.

Grinders are the drones who grind out work, churing out billable hours to keep the law firm's revenues and profitability humming. These are the associates. For many associates, the clear emphasis is on billing time. When partners are engaged more in nonbillable administrative and business production work, it becomes more important that associates make up the slack with billable hours. Although associates bill at a lower hourly rate than do partners, what they lack in quality of expertise they can make up in sheer quantity of hours produced and billed to client files.

Christopher S. Marks of Williams Kastner in Seattle was recently interviewed by the Metropolitan Corporate Counsel in "Managing Litigation Costs in Difficult Times". In response to a question on segmenting fixed fees into various phases and billing for those one by one rather than total, Christopher Marks replies, "Even where we haven't scheduled a flat fee program and are continuing on the regular hourly rate, we structure our litigation plans and our budgets so that there are identifiable benchmarks within the litigation that we track against the budget."

Allegient Systems, a leading software solution and service provider who continues to set the standard in legal expense and performance management, celebrates its 20 year anniversary. As the insurance industry's most experienced e-billing service provider, Allegient Systems now supports over 6,000 law firms and 65 insurance carrier clients.

John F. Kelly, CEO of Allegient commented, "We celebrate our first 20 years with a great deal of thanks to and pride in the entire Allegient team. We also extend our gratitude to our law firm and insurance carrier clients for their commitment to us."

Kelly continued, "We've work hard to attain and maintain our leadership position as the 'go to' firm when it comes to effective and efficient legal expense management. As we begin our third decade we will continue our commitment to provide only the highest quality products and services in our goal to help our clients effectively and efficiently manage legal expenses."

In an article, "Legal Fees: Ten Things Your Lawyer May Not Want You To Know", Daniel L. Abrams of the Law Offices of Daniel Abrams in New York breaks down ten things lawyers may not want clients to know:

1. The Retention Letter Or Agreement Cannot Be Used To Justify An Unreasonable Fee
2. Any Promises Made By A Lawyer To A Client Will Be Enforced
3. Diligence In Reviewing A Bill Can Save Money
4. Courts Have Invalidated Many Methods Of Attorney Billing In Recent Years
5. A Lawyer Cannot Necessarily Quit Representing You Because Of A Fee Dispute
6. A Lawyer Is Strictly Limited In What He Can Do To Collect His Fee
7. A Lawyer Has Many More Reasons Than a Client To Avoid Fee Dispute Litigation
8. Even If You Have Already Paid Your Lawyer, You May Be Entitled To Get Your Money Back
9. Any Unethical Behavior May Be Grounds For Total Or Partial Forfeiture Of Fees
10. Arbitration Provides A Cost-Effective Approach To Small Disputes

A recent article, "How to Lose a Client in 10 Steps" sites fee and billing issues as the main reasons why clients leave attorneys. The article concludes that communication is the key to a healthy attorney-client relationship. "Where potential issues arise, communication enables both parties to address issues and resolve them in a timely fashion."