Legal auditors are often hired by insurance carries, law firms, corporations, government agencies, and municipalities to review legal invoices in underlying litigation and transactional matters.  No two legal auditing programs are the same.  So, in order to ensure the most accurate and reliable legal audit results, clients  should ask the following questions:

Is your legal audit program certified by NALFA?

Do you abide by NALFA's Industry Best Practices?

Is your legal bill review process manual or computerized?

Do you do quantitative or qualitative analysis?

Do your legal bill auditors participate in professional development programs?

What is your turn around time?

Will you back up the legal audit report with expert testimony, if needed?

Do you look at the legal invoices alone or the work product as well?

Who reviews the bills (i.e. attorneys, paralegals, accountants)?

Do your legal auditors keep up with the latest attorney fee and legal billing jurisprudence?

NALFA welcomes John D. O’Connor to the Attorney Fee Practice Group.  John O’Connor is the principal of O’Connor & Associates in San Francisco, specializing in attorney fee disputes.  Mr. O’Connor and his team have more than 35 years of experience dealing with complex attorney fee disputes and have served numerous clients as both litigator and expert consultant.

As a former Federal Prosecutor, Mr. O’Connor has successfully represented high-profile clients including the FDIC, R.J. Reynolds Tobacco Company, the  California Attorney General, and Golden State Warriors Head Coach Don Nelson.  He has analyzed numerous legal audits and expert fee opinions in attorney fee disputes throughout the country, and frequently serves as an expert witness on a range of attorney fee and billing matters.

In published opinions in two recent cases, the Court specifically referred to Mr. O’Connor’s expert opinions as the basis for discrediting auditor criticisms. One opinion supported a $19.8 million fee award, employing a 2.0 multiplier, in a wage and hour case; another, a $3.1 million fee award, with a 1.5 multiplier, in a wrongful termination case.

His seventy trials and forty years of litigating complex cases enables him to draw on a vast pool of experience. Mr. O’Connor and his team offer a broad range of services including disputes over the appropriate billing rates, litigation efficiency, task assignments, and staffing, litigation success and prevailing party determination, and litigation skill.  Their work in this area has been widely lauded by clients, lawyers, courts, and arbitrators.

For more information on John O’Connor & Associates, visit http://www.joclaw.com/

NALFA has identified 16 factors in court awarded attorney fees.  Several of these fee factors draw from seminal fee jurisprudence cases Goldberger v. Integrated Resources and Johnson v. Georgia Highway Express.

1. Reasonable, Prevailing Hourly Rates 
2. Reasonableness of the Number of Hours Billed
3. Percentage of the Fund: Fees in Relation to the Economic Value of the Settlement
4. Successful Results Obtained for the Number of Client(s)
5. Risk of the Litigation: Non-Payment and Preclusion of Other Cases
6. Quality of the Work and Representation
7. Experience, Reputation, and Ability of the Attorneys
8. Novelty and Difficulty of the Legal Issues in the Underlying Case
9. Efficient Litigation Management Practices: Case Staffing and Task Assignments
10. Economic Exposure: Fees in Relation to the Amount at Stake in the Underlying Case
11. Fees in Relation to Similar Cases
12. Nature of the Working Relationship with Opposing Counsel
13. Customary Timekeeping Billing Practices
14. Billing Judgment
15. Public Policy Considerations
16. Nature and Length of the Attorney-Client Relationship

Class counsel are seeking attorney fees of $720 million and $27 million in expenses in the Visa/MasterCard Merchant Antitrust MDL.  The fee request represents 10 percent of the estimated value of the cash value of the settlement.  The attorneys, representing a class of more than 7 million merchants, filed court documents seeking final approval of the accord from U.S. District Judge John Gleeson in New York.

The settlement, valued at $7.25 billion, is the largest antitrust settlement in U.S. history.  In fact, that figure is more than double the recovery in any previous private antitrust action.  According to the memorandum in support of fees (pdf), filed by Robins Kaplan Miller & Ciresi, Berger & Montague, and Robbins Geller Rudman & Dowd, the lead plaintiff firms, wrote, “The settlement will affect as great a segment of the United States economy as any previous antitrust class action.”  In addition, the injunctive relief rule changes in the case will likely translate into billions of dollars beyond the settlement.

Over 60 law firms worked on the litigation over an eight year period, investing nearly 500,000 hours in the action.  Class counsel complied, reviewed, and organized a massive discovery record, which included 65 million pages of documents, produced by the 19 defendants.  In the trial preparation phase, class counsel produced five expert reports, while defendants responded with 12 expert reports, which in turn produced six expert rebuttal reports, creating Daubert challenges from both sides.

In addition, plaintiffs’ counsel assisted in securing legislation regulating interchange fees by passing the Durbin Amendment in the Dodd-Frank Act.  As a result of this amendment, class members saved an estimated $9 billion per year in debit-card fees.  What is more, this action also prompted the DOJ and several states’ Attorneys General to investigate anti-steering rules, resulting in a consent judgment against Visa and MasterCard, limiting several of Visa and MasterCard rules, the very rule changes the underlying action sought.

“Indeed, the settlement secured by class counsel is unprecedented in the history of antitrust law,” said Terry Jesse, executive director of NALFA.  “The fact that the litigation produced beneficial legislative and executive action, relying primarily on the discovery record developed in the MDL, in the plaintiffs’ favor, may be reason alone to justify the 10 percent fee request,” Jesse concluded.

The case is In re Payment Interchange Fee and Merchant Discount Antitrust Litigation. For more information on this MDL, visit https://www.paymentcardsettlement.com

A recent The American Lawyer story, “With Record Settlement Under Fire, Lawyers in Credit Card Case Ask for $720 Million in Fees,” quoted NALFA as the expert source for statistics on the nation’s largest class action attorney fee awards.  The story centered on the $720 million attorney fee request in the $7.25 billion settlement in the MDL, In re Payment Interchange Fee and Merchant Discount Antitrust Litigation.  The story (which requires NLJ premium access) said:

Setting aside the fees generated by the $206 billion tobacco industry settlement in 1998, a $720 million fee award would be the largest ever in a class action. By way of comparison, Enron's landmark $7.2 billion deal with investors netted plaintiffs lawyers $688 million in fees. A $3 billion settlement that Visa and MasterCard reached over debit card fees in 2003--then the largest-ever antitrust class action settlement--produced a $220 million fee award. Judge Gleeson also oversaw that case. (The National Association of Legal Fee Analysis (NALFA) has a handy chart detailing top class action fee awards.)

The story went on to say:

Terry Jesse, the executive director of NALFA, told us that Friday's fee request may be a reasonable one, given the costs that came with the interchange fee litigation. "Antitrust cases are very complex and require tremendous work," he said.

NALFA is hosting The Attorney Fees Conference - 2013 at the Bar Association of San Francisco on October 25, 2013.  The conference is widely regarded as the nation’s largest and most comprehensive program on attorney fees and legal billing.  Leaders from across the legal fee analysis profession participate as sponsors, panelists, and attendees.  Panelists include:

The Honorable Richard A. Kramer is a San Francisco County Superior Court Judge in the Complex Civil Litigation Division.  Prior to joining the bench in 1996, Judge Kramer worked as a civil litigator representing the banking industry.

The Honorable William F. Downes is a former U.S. District Court Judge of Wyoming, 12 years of which he was the Chief Judge.  Judge Downes served 17 years on the bench where he presided over hundreds of jury and bench trials.  Prior to serving on the federal bench, Judge Downes was an accomplished trial lawyer in Wyoming, handling cases ranging from tort and real estate matters to medical malpractice and personal injury disputes.  Judge Downes currently serves as a full-time JAMS mediator and arbitrator where he handles complex civil disputes throughout the U.S.

The Honorable Cruz Reynoso is a former Associate Justice of the Supreme Court of California and Associate Justice for the Third District Court of Appeals of California. Justice Reynoso is currently Professor of Law Emeritus at UC Davis School of Law.  He is a nationally recognized leader in civil rights, immigration, and the administration of justice.  Justice Reynoso also serves as an expert witness on a range of attorney fee matters.

Bruce R. Meckler serves as Co-Chair of Meckler Bulger Tilson Marick & Pearson in Chicago.  In addition to his nationwide litigation practice, focused on complex commercial litigation, insurance and reinsurance disputes, white collar criminal matters and professional liability litigation, Mr. Meckler is a nationally preeminent attorney fee expert who frequently testifies on the reasonableness of legal fees in court and arbitration.  Mr. Meckler has conducted or supervised hundreds of legal bill reviews involving billions of dollars in legal fees.

Philip R. Strauss is the Director of Forensic Technology Services at KPMG LLP.  Mr. Strauss has over 20 years experience in corporate executive leadership and corporate law department management, including being General Counsel for two publicly traded Silicon Valley software companies and being in private practice for two top-tier national law firms.  Mr. Strauss also served as a two-term President of the Association of Corporate Counsel’s San Francisco Bay Area Chapter and founded the ACC’s Corporate Counsel University.

John D. O’Connor is the principal of O’Connor & Associates in San Francisco.  Mr. O’Connor has tried over 70 cases in federal and state venues throughout the country, with highly enviable success in complex, contentious disputes.  A former Federal Prosecutor, Mr. O’Connor has successfully represented high-profile clients including a former California Attorney General and Golden State Warriors Head Coach Don Nelson.  He has analyzed numerous legal audits and expert fee opinions in attorney fee disputes throughout the country, and frequently serves as an expert witness on a range of attorney fee and billing matters.

Gary A. Greenfield, a former litigator, founded Litigation Cost Management in Oakland to consult exclusively on attorney fee issues.  Mr. Greenfield acts as an expert witness on attorney fee matters and has been a court-appointed Special Fee Master and conducted numerous analyses related to legal fees in complex litigation on behalf of parties seeking and parties opposing recoveries of legal fees.

Steven A. Tasher is the CEO and Managing Director of Wyatt Partners LLC.  He is a former Deputy Attorney General of New Jersey, partner at Donovan, Leisure, Newton & Irvine and Willkie, Farr & Gallagher and Vice President and Associate General Counsel of Wyeth.  His firm specializes in litigation budgeting, legal billing practices, and effective litigation management.

Scott Wirtz is Controller at Loeb & Loeb, LLP in Los Angeles and sits on the LEDES Oversight Committee (LOC) Board of Directors.  Mr. Wirtz has over 20 years of law firm finance experience and has written articles published in Law Technology News and Metropolitan Corporate Counsel.

Ken Bacon is Counsel at Mastagni, Holstedt, Amick, Miller & Johnson in Sacramento.  Mr. Bacon is the Presiding Arbitrator at the State Bar of California’s Mandatory Fee Arbitration Program.  He has trained fee dispute arbitrators and mediators throughout the state of California and has presided over hundreds of attorney-client fee disputes.

Malcolm Sher is a full-time mediator and arbitrator specializing in high emotional, cross-cultural disputes.  Mr. Sher is a member of the State Bar of California’s Mandatory Fee Arbitration Executive Committee and Chair of the Contra Costa Bar Association’s Mandatory Fee Arbitration Committee.  He has arbitrated and mediated hundreds of fee disputes and lectured widely on the subject of fee arbitration and mediation.

William Gwire is the principal of Gwire Law Offices in San Francisco.  Mr. Gwire was identified in California Lawyer as one of only a handful of “go to” plaintiff’s legal malpractice lawyers in California.  He tried to judgment one of the largest legal fee disputes in history, the $100 million fee dispute between Dow Corning and a consortium of insurance companies arising out of breast implant litigation.  Mr. Gwire achieved a $13.7 million deduction in the attorney fee claim.

Martin Quinn is a full-time JAMS arbitrator and mediator who settles, arbitrates, and manages complex legal disputes.  Mr. Quinn served as the court-appointed Special Fee Master in the MDL, In re TFT-LCD (Flat Panel) Antitrust Litigation, issuing an expert report and recommendation on the $310 million fee allocation dispute in the MDL.

Richard M. Pearl is the author of California Attorney Fee Awards, 3d Ed., published by California's Countinuing Education of the Bar.  Mr. Pearl has litigated some of the key attorneys’ fees cases in California, including Graham v. DaimlerChrysler Corp., Flannery v. Prentice, and Maria P. v. Riles.  He also has served as an expert witness on attorneys' fees, and his opinions have been cited by numerous courts.  He also has served as an Adjunct Professor of Law at Hasting Law School.

Aashish Y. Desai is the Managing Partner of Desai Law Firm in Costa Mesa.  Mr. Desai is an experienced advocate for clients and enjoys a reputation of integrity, intelligence, and professionalism among his peers.  Mr. Deasi has recovered millions of dollars for class members on a range of mass torts and has earned record-setting attorney fee awards.

Eric H. Gibbs is a Partner at Girard Gibbs LLP in San Francisco.  Mr. Gibbs represents plaintiffs in a broad range of cases, including employment, pharmaceutical and medical device litigation, as well as consumer class actions.  Mr. Gibbs has achieved significant recoveries on behalf of class members including record-setting settlements in Providian Credit Card Cases and Mitchell v. American Fair Credit Association and Mitchell v. Bankfirst.

Francis O. Scarpulla is a Senior Partner at Zelle Hofmann in San Francisco.  Mr. Scarpulla specializes in complex federal antitrust class actions, representing plaintiffs in many federal antitrust class actions including Pharmaceutical Antitrust Litigation, Microsoft Monopolization Antitrust Litigation, and DeBeers Diamond Antitrust Litigation.  Most recently, Mr. Scarpulla achieved a record-breaking $1.082 billion settlement in the MDL In re TFT-LCD (Flat Panel) Antitrust Litigation, earning a $310 million attorney fee award.

For more information, visit http://www.thenalfa.org/CLE-Programs/

The National Association of Legal Fee Analysis (NALFA) has launched a new pilot project that focuses on attorney fees in MDLs.  Our objective is to work with courts to publish attorney fee award statistics in MDL cases.  “Our goal is to work with the U.S. Judicial Panel on Multidistrict Litigation (JPML) and U.S. District Courts to publish statistics on attorney fee awards in MDL cases.  These statistics would provide real-time attorney fee metrics on pending MDLs throughout the U.S.,” said Terry Jesse, executive director of NALFA.  “Compiling these MDL case statistics would provide a valuable tool for fee-requesting lawyers and fee-awarding judges,” Jesse said.

In addition, NALFA has created a new Special Fee Master Program to address attorney fee issues in complex federal litigation.  Attorney fee and legal billing issues can often arise in the MDL process.  From pretrial time keeping practices to post-settlement fee allocation disputes, our fee experts have the skills and expertise to resolve fee issues in an efficient manner and in line with FJC’s Manual for Complex Litigation, Fourth Edition § 14.231 (2004) and FJC’s Awarding Attorney Fees and Managing Fee Litigation, Second Edition § 4(D)(3) (2005).

In Viveros v. Donahoe, CV, 2013 WL 1224848 (C.D. Cal. Mar. 27, 2013) plaintiff, after prevailing in a pregnancy discrimination case, sought a fee award of $440,570 under 42 U.S.C. § 2000e-5(k).  Plaintiff sought a rate of $500 per hour for its lead attorney (“Yun”) and sought compensation for a total of 1235.6 hours.

Making its own independent inquiry and relying on NALFA Attorney Fee Practice Group member Jim King’s expert opinion, the Court found that plaintiff’s time entries evidenced “a pattern of billing more hours than reasonably necessary to complete the tasks described.”  The court reduced the total number of chargeable hours by 40 percent.  Viveros v. Donahoe, 2013 WL 1224848 at *6.  The court also reduced the requested $500 hourly rate for plaintiff’s lead attorney to $350 per hour:

Because plaintiff has not adduced adequate evidence to corroborate the hourly rate requested for Yun, and because defendant’s evidence and the published data indicate that the prevailing rate in the community for similar work performed by attorney of comparable skill, experience, and reputation is lower than $500, the court will award fees to plaintiff for Yun’s services at the hourly rate of $350.  Based on the case law cited above, the evidence adduced by defendant, the published data, and the court’s own experience and knowledge of rates in the community, the court finds that this hourly rate more accurately represents prevailing market rates for comparable services.  Viveros v. Donahoe, 2013 WL 1224848 at *5.

The court awarded plaintiff $217,273 in attorneys’ fees, $3,870 in law clerk fees, and $4,250 in expert fees.  For more on Jim King, visit http://www.kinglawfirmcorporation.com/.

DLA Piper has issued a memo (pdf) is response to The New York Times story, “Suit Offers a Peek at the Practice of Inflating a Legal Bill” and in response to the suit, DLA Piper v. Victor.  In that suit, former client Adam Victor says court exhibits show DLA attorneys discussing deliberate overbilling on his bankruptcy case.  In one 2010 email, a then-DLA attorney refers to a “churn that bill, baby!” approach and says “that bill shall know no limits.” 

The law firm in a public statement said: “We hold ourselves to the highest legal and ethical standards.  The behavior as described is unacceptable to DLA Piper and our clients.  The emails were in fact an offensive and inexcusable effort at humor, but in no way reflect actual excessive billing.”

Roger Meltzer, DLA Piper United States co-chair, said in an interview that DLA attorneys were answering calls from clients yesterday and others reached out to in-house counsel on their own.  Meltzer said no clients have cut off ties as a result of the exposure of the emails and he believed the firm would not suffer a loss of revenue or client relationship.  Clients have been “enormously supportive,” and know the emails are not related to the firm’s standards, performance or billing practices, he said.

Victor’s suit was in response to a fee collection action initiated by DLA to collect $675,000 in unpaid legal fees.  In the Victor case, the firm believes it provided legal services that ought to be paid for.  He said DLA wouldn’t sue a client “if we were not confident in the appropriateness of a bill.”  The memo went on to say, “our bills and billing practices undergo the most sophisticated reviews and audits by clients who employ such techniques as a standard practice in connection with outside counsel billings.”

“There’s been a little overreaction to this story from some on the corporate side,” said Terry Jesse, executive director of NALFA.  "Some are using this story to claim overbilling is widespread at DLA and other law firms.  But it’s important to keep in mind that law firms are not monolithic.  There are internal practice groups within law firms that manage cases.  If the emails were more than inappropriate humor, it could be the case that this bankruptcy case was inefficiently managed by a practice group within DLA,” Jesse concluded.

Attorney fee experts are often hired in cases when underlying legal fees are at issue.  Attorney fee experts are retained to support or challenge the reasonableness of attorney fees at trial or in arbitration.  Fee experts can provide expert reports and opinions on the factors that related to the reasonableness of attorney fees.  Here are some tips when hiring an attorney fee expert on a fee matter:

Retain an attorney fee expert on large, complex fee matters
It is considered a litigation best practice to retain a fee expert on large, complex fee matters of one million dollars or more.

Hire a qualified attorney fee expert
Hiring an experienced, qualified fee expert will add credibility to a fee claim and their expert report and testimony will stand up under cross-examination.

Hire a fee expert early in the process
Retain a fee expert early in the process because the work required can take several weeks and even months.

The Attorney Fee Practice Area is a new, highly specialized practice area that covers a range of matters where attorney fees are at issue.

NALFA has created a new on-line Submit-A-Case form for clients who have attorney fee or legal billing issues.  Now, clients such as law firms, courts, and corporations with attorney fee or legal billing issues from across the U.S. can submit their case on-line. 

Whether clients are seeking to recover attorney fees or save on fees, parties will have the opportunity to talk with a member of NALFA's Attorney Fee Practice Group about their fee matter.

NALFA’s Attorney Fee Practice Group is the first-of-its-kind national practice group specifically devoted to attorney fee issues.  Members of NALFA’s Attorney Fee Practice Group are qualified attorney fee experts, fee dispute mediators, and legal bill auditors.  Members of NALFA's Attorney Fee Practice Group adhere to Industry Best Practices.

To submit an attorney fees or legal billing inquiry to NALFA’s Attorney Fee Practice Group, visit http://www.thenalfa.org/Practice-Areas/submit-a-case/

A recent Association of Certified E-Discovery Specialists (ACEDS) story, “Law Firm’s Big Markup of Contract Review Fees Sparks Client Attack, US Court Scrutiny,” reported on the use of fee objectors in  In  re Citigroup Securities Litigation.  In the article, NALFA was quoted as a critic of serial fee objectors:

“Our issue with fee objectors is that they usually have an axe to grind, says Terry Jesse, executive director of the National Association of Legal Fee Analysis, in Chicago.  This is not the first time Ted Frank has objected to fees, and he has a very tangential connection to the case.”

Jesse tells ACEDS that the solution is for courts to appoint special fee masters, who can assess bills independently and objectively.

NALFA Attorney Fee Practice Group member Ken Moscaret, Esq. is a nationally-recognized expert witness on legal fees and litigation management who testifies in multimillion-dollar fee disputes, and who has references among both law firms and corporate clients.  Mr. Moscaret believes that clients which prematurely fire their law firms due to unresolved frustrations with the attorney-client relationship or with the escalating legal bills in an expensive lawsuit can hurt themselves in the process.

To address that problem, Mr. Moscaret and his firm, Moscaret Consulting, have introduced a new consulting program to advise and guide clients on ways to avoid costly, damaging break-ups with their law firms.  A ruptured attorney-client relationship results in a lose-lose for both sides.

Moscaret Consulting works with all kinds of clients (e.g., public and private companies, government entities, non-profits, and individuals) who have become frustrated enough with their law firms or legal bills in an expensive lawsuit to be contemplating firing their law firm and switching counsel in mid-case.  Moscaret Consulting works to prevent that from happening.

They show clients, often for the very first time, how to defuse their frustrations by taking proactive, concrete steps each month that help avoid a break-up with their law firm, thereby salvaging the ongoing relationship.

Mr. Moscaret views this approach as a win-win for both client and law firm, who might otherwise ruin their relationship for good, lose their entire investment in one another in the process, and end up in a fee dispute – all bad outcomes.

For a one-page summary of Moscaret Consulting’s specialized services, CLICK HERE.

For more information on this conference, visit http://www.thenalfa.org/CLE-Programs/

A recent study from NYU Law School’s The Center for Justice and Democracy (CJ&D), “Courthouse Cornerstone: Contingency Fees and Their Importance for Everyday Americans (pdf),” finds that the contingency fee system provide everyday Americans with access to justice and prevents meritless cases from clogging the courts because contingency fee lawyers front litigation expenses and are not paid unless the case is successful.

“Contingency fee attorneys are outcome-focused, not time focused,” notes CJ&D.  “Their interest is to work hard and achieve the best possible results from their clients in timely efficient manner.”  There are three main societal functions of the contingency fee system:

1. Contingency Fees Provide Everyday People With Access to the Courts;
   
   
2. Contingency Fees Screen out Meritless Cases; and
   
   
3. Contingency Fees Align Attorney-Client Interests and Promote Efficiency of Judicial Resources.

The study directly counters the tort reform lobby who seek government-imposed wage and price controls, interfering directly with the right of citizens to contract in a private contingency fee relationship and turn a free-market approach to providing legal representation into a botched system of government regulation that harms injured victims’ quest for justice.

“There are legislative efforts underway from the tort reform lobby to undermine our contingency fee system,” said Terry Jesse, Executive Director of NALFA.  “At NALFA, we are committed to strengthening our long-standing contingency fee system and oppose efforts to place statutory limits on contingency fees.  We look forward to working with other like-minded groups to ensure a strong contingency fee system,” Jesse concluded.

A recent Forbes story, “Citigroup Plaintiff Lawyers Fire Back at Fee Objectors,” reports that lawyers seeking nearly $100 million in attorney fees for negotiating a $500 million settlement with Citigroup fired back at critics who accused them of unreasonably marking up the services of temporary attorneys.

Kirby McInerney defends the fee request, saying that’s what lawyers at equivalent firms make (after courts tack an extra multiple to reflect the risk of earning nothing it the contingency-fee case fails).  “Project-specific personnel were performing highly complicated, highly important work – work that, absent extensive training, almost no one else could do,” said Kirby McInerney partners Ira Press and Peter Linden in their 61-page response.

The detailed response is aimed mostly at perpetual fee objector and class action foe Ted Frank.  In the fling Kirby McInerney says it rejected 75 percent of the lawyers it considered hiring on a temporary basis and sought out graduates of prestigious schools with specialized training in the collateralized debt obligations at the core of the litigation.  The final team included two graduates of Columbia Law School, five from NYU, and four from Georgetown, as well as a Chartered Financial Analyst and two MBAs.

“Almost all fee objectors are not qualified fee experts.  Perpetual fee objectors are not qualifed fee experts because they are not hired or appointed by anyone; they appoint themselves to these cases to advance their political agenda.  The fact is that using highly-skilled, experienced temporary attorneys are a very cost effective model for law firms in large, complex cases.  The alternative, training-up young associates on these highly complex issues, would have actually been more costly for Citigroup,” said Terry Jesse, Executive Director of NALFA.

1.  $305M Southern Peru Copper Attorney Fee Award

2.  $144M Avandia MDL Attorney Fee Award

3.  $140M Mattel-MGA Bratz Doll Attorney Fee Dispute

4.  $90M Black Farmers Attorney Fee Request 

5.  $30M Bluetooth MDL Attorney Fee Calculation & Request

New Proposed Guidelines for Bankruptcy Fees in Large Cases

Judge Approves $144M in Fees in Avandia MDL

Plaintiffs’ Lawyers Seek $4.95M in Moody’s Shareholder Class Action

First Circuit Tosses $30M in Fee Award in Volkswagen Case

Ninth Circuit Rejects Attorney Fees in Kellogg Case

NALFA’s New Attorney Fee Dispute Mediation Program

Plaintiffs’ Lawyers Defend Fee Award in Southern Peru Shareholder Litigation

Mattel Challenges Largest Copyright Fee Award in U.S. History

Attorney Fee Analysis Shows Plaintiffs’ Fee Request Under-Valued in Bluetooth MDL

House GOP Targets Contingency Fees in State AGs Contracts

Jim King of the King Law Corporation in San Diego joined NALFA’s Attorney Fee Practice Group.  Jim King is a qualified attorney fee expert and fee dispute arbitrator and mediator.  Jim King learned the intricacies of attorney fee disputes – and how to view them from the viewpoint of the attorney and the client – through long hours of arbitrating hundreds of these disputes.  He was first appointed a fee arbitrator by the State Bar of California in the mid-1980s.  A decade later, as Co-Chair of the San Diego County Bar Association Fee Arbitration Committee, he reviewed and approved every fee award in San Diego County for over a year.

Through this work and through his own practice, Mr. King developed a deep understanding of the State Bar’s Guidelines for deciding attorney fee disputes, and his understanding of the attendant case law concerning such is second to none.  Outside of California, Mr. King has handled an eight-figure legal fee award dispute in Mississippi, and the American Arbitration Association once selected Mr. King to be Panel Chair (Chief Arbitrator) in a $50 million fee claim in Pennsylvania.

Mr. King has testified in trial, arbitrators, depositions, motions, and declarations about the reasonableness, or lack thereof, of fee requests in virtually every imaginable context.  His testimony has concerned fee disputes involving some of the most prominent attorneys and law firms in the U.S., as well as Fortune 100 companies.  The total amount of attorneys’ fees which he has considered as either an advocate, expert witness, or arbitrator exceeds $100 million.

For more information, please visit http://www.kinglawfirmcorporation.com/

A recent Thomson Reuters Legal story, “Should State AGs be Allowed to Use Contingency Fee Lawyers?” reported on the relationship between state AGs and outside counsel in public interest litigation.  The article cites “tort reform” sources (i.e. U.S. Chamber of Commerce) who think this is a huge problem and are challenging the use of contingency fee lawyers in court.  In fact, the tort reform lobby is even considering federal legislation to regulate states’ ability to hire contingency fee lawyers.

In a report, “Contingency Fee Plaintiffs’ Counsel and the Public Good? (pdf),” published by Husch Blackwell, reports that 10 states have passed legislation addressing AGs’ use of contingency fee lawyers – and six of them (Texas, Wyoming, Arkansas, Kansas, North Dakota and Alabama) have imposed limits on the use of contingency fee counsel.  And judges in the half-dozen cases in which defendants challenged state governments’ use of outside counsel have overwhelmingly rejected arguments that defendants’ due process rights violated by such arrangements.

But the tort reform lobby is challenging the use of outside contingency fee lawyers in court.  In Kentucky, tort reform advocates are challenging Democratic Kentucky Attorney General Jack Conway’s authority to hire contingency fee lawyers in Commonwealth of Kentucky ex rel. Conway v. Merck & Co., Inc.  In that case, Kentucky had entered into a contract (pdf) with Garmer & Prather to investigate and litigate any Vioxx-related claims the state might have against Merck under its consumer protection act.  Merck claimed the AG violated his duty to serve the public interest by ceding control of the case to private lawyers incentivized to maximize the recovery against Merck.  As a result, Merck claimed its due process rights were compromised.  Merck is represented by John Beisner of Skadden Arps, a noted tort reform advocate.

"The private attorney general doctrine is a fundamental principle in American jurisprudence.  We need the plaintiffs' bar to take on these important public interest cases.  This is a pure partisan effort to weaken the doctrine and serve corporate interests.  Of course state AGs should be allowed to use outside contingency fee lawyers.  In fact, with state budgets stretched thin it makes economic sense to only hire outside lawyers who work on a contingency fee basis,” said Terry Jesse, Executive Director of NALFA.  “Working on a contingency fee basis saves taxpayers millions of dollars and ensures the people are protected against corporate wrongdoers,” Jesse concluded.

NALFA also reported on these issues in “House GOP Targets Contingency Fees in State AGs Contracts” and "Mississippi Bill Limits Fees for Outside Lawyers and AG's Powers"

NALFA would like to welcome Steven Tasher, Co-CEO and Managing Director of Wyatt Partners, LLC as the newest member of the Attorney Fee Practice Group.

Wyatt Partners’ primary focus is its program aimed at the evaluation and control of legal fees and costs.  In the field of Legal Fee Expert Analysis, Wyatt has the expertise and credentials to testify as an expert and provide opinions on law firm’s/law firm’s clients’ behalf in areas including, but not limited to:

Overall reasonableness of legal fees and costs;

Detailed analysis of legal fees and expenses;

Law firm billing rates;

Issues regarding law firm retention/selection processes; and

Issues involving coordinating counsel/liaison counsel.

Wyatt Partners’ expertise also encompasses a program to review and audit corporate legal fees in complex litigation – a program that has been highly successful in cost savings and cost avoidance.  Additionally, the company has developed a litigation budget and support program that has a proven track record of dramatically reducing litigation spend.  Wyatt Partners offers a comprehensive, focused, and structured program to control litigation costs and includes:

Comprehensive evaluation of the current litigation process and costs;

Creating fee agreements and guidelines which incorporate cost saving and methodologies;

Establishment of a litigation planning process and monitoring system;

Creating a dedicated Budget Group to track and trend legal spend;

Implementing a Budget Charter committed to cost savings;

Utilizing appropriate cost-effective technology solutions; and

Establishing programs to review and control the cost of third party vendors.

For more information, please visit Wyatt Partners at http://www.wyattpartners.com/

 Attorney fees are a multi-billion dollar practice area in the U.S.

The attorney fee practice area is a new, highly specialized practice area that covers a range of matters where attorney fees at issue.  This practice area covers 4 main areas:

Supporting or Challenging Attorney Fee Requests
Attorney Fee Dispute Litigation
Attorney Fee Dispute Mediation
Litigation Management & Legal Spend Programs

Our members and sponsors are the leaders who define, shape, and advance this practice area.

There's been a lot of hand-wringing by the WSJ and Thomson Reuters News over big attorney fee awards in recent shareholder class actions.  See “Foretelling the End of Money-for-Nothing Class Actions,” and “Dealpolitik: Delaware Supreme Court Should Revisit $304M Legal Fee.”  These news stories cherry-pick a handful of class actions from across the country that have resulted in large fee awards for winning plaintiffs’ lawyers.  To the untrained eye, these multi-million dollar fee awards seem jaw-dropping, but if you drill down in each particular case, the criticism is unwarranted.

Criticism over these big fee awards fluctuates between the work and the results of winning plaintiffs’ counsel.  When winning plaintiffs’ lawyers obtain favorable non-monetary judgments, they criticize the results, not the work.  When winning plaintiffs’ lawyers obtain big monetary judgments, they criticize the work, not the results.  The reality is, these relatively "big" fee awards are determined by a whole range of factors, which include, among other things, the work AND the results.

Criticism of Moody's $4.5 million fee award focused on the lack of monetary judgment and all-but-ignored the over 28,000 hours of work by plaintiffs' counsel.  Not all class actions are about obtaining cash judgments.  You can’t always calculate the economic dollar value of public benefits that extent well beyond class members.  In these types of class actions, plaintiffs’ counsel act as private attorneys general for important public interest matters.  Winning plaintiffs' lawyers in these cases shouldn't be penalized by not being fairly compensated.  In fact, there's empirical research that class counsel don't make enough money in these cases.  See: "Do Class Action Lawyers Make Too Little?"

Criticism of Southern Copper's $305 million fee award focused on the  plaintiffs' counsel work of $35,000 per hour and all-but-ignored the $2 billion judgment obtained for class members.  When winning plaintiffs’ counsel obtains large settlements in class actions, they ought not be penalized for working efficiently.  When class actions drag on year after year, it is often the result of a high-priced, work-churning defense.  Just because large settlements can happen quickly, doesn’t mean winning plaintiffs’ counsel should be penalized by not being fully compensated.

“Whether big or small, attorney fee awards are determined by a range of factors,” said Terry Jesse, Executive Director of NALFA.  "Work and results are but just two factors we've considered here.  But judges and qualified attorney fee experts look at the other range of factors and they are in the best position to judge these fee awards because they do the in-depth forensic analysis that’s required in underlying cases,” Jesse said.

Today, NALFA Executive Director, Terry Jesse met with U.S. Trustee, Patrick S. Layng of the DOJ’s U.S. Trustee Program in Chicago.  Mr. Layng is the U.S. Trustee who oversees Region 11 which includes U.S. Bankruptcy Courts in the Northern District of Illinois, the Western District of Wisconsin, and the Southern District of Wisconsin.

The U.S. Trustee Program (USTP) is a component of the Department of Justice responsible for overseeing the administration of bankruptcy cases and private trustees under 28 U.S.C. § 586 and 11 U.S.C. § 101, et seq.  Part of the responsibilities of the USTP is to ensure attorney fees paid in underlying bankruptcy cases are reasonable.  The USTP seeks to improve efficiency when reviewing attorney fees for reasonableness.  When the USTP reviews attorney fees, they are looking for block billing, overstaffing, and other litigation inefficiencies, that can quickly add up.

“It was great to visit with the U.S. Trustee, meet with the staff, and get a better understanding of the work they do,” said Jesse.  “We talked about our mutual interests in reviewing attorney fees for reasonableness and ways to improve that process.  I look forward to working with them in the future,” Jesse concluded.

A recent Thomson Reuters story, “J&J Faces Settlement Objection From Ted Frank,” reports that Ted Frank, a professional fee objector and tort reform lobbyist, who frequently seeks to knock down attorney fees in class action settlements, has now inserted himself into the middle of a shareholder derivative lawsuit.  Frank is asking a federal court in New Jersey to dismiss an entire action brought against Johnson & Johnson board members and executives, arguing that the settlement, in which the plaintiffs’ attorneys could receive $10 million, provides no benefit for shareholders and should have never been filed.

In July of this year, Johnson & Johnson, represented by attorneys at Sidley Austin, and members of its board and other company leaders, represented by Patterson Belknap Webb & Tyler, agreed to settle multiple derivative actions filed in 2010 and 2011.  The plaintiffs alleged that the individual defendants breached their fiduciary duties and caused the company regulatory and legal problems relating to drug marketing and medical product and device quality control. 

The proposed settlement agreement, submitted to U.S. District Judge Freda Wolfson in Trenton, New Jersey, requires the defendant to adopt certain governance reforms, to spend the funds necessary to carry out the reforms, and to maintain the provisions of the agreement for five years from the effective date.  The settlement agreement states that the company has agreed to pay plaintiffs’ attorney, led by Carella, Byrne, Checchi, Olstein, Brody & Angello and Bernstein Litowitz Berger & Grossman, “not more than $10 million for their fees and $450,000 for their expenses, subject to court approval.”

“Not all professional fee objectors are actual qualified attorney fee experts, because they don’t do the expert work required for each case,” said Terry Jesse, Executive Director of NALFA.  “The work of a fee expert requires in-depth analysis that considers a range of factors that determine reasonable attorney fees.  Our fee experts are independent experts that rely on underlying billing statements and work product.  Most class action fee objectors don’t put in the time to do the in-depth analysis required in cases, instead they only file general, boilerplate fee objections,” Jesse concluded.

A recent Thomson Reuters News story, “Analysis: Lawyers Eye Payday in Record Credit Card Settlement,” cited the National Association of Legal Fee Analysis (NALFA) as the leading authority on attorney fee awards.  NALFA was asked to provide statistics on the largest attorney fee awards in U.S. history. 

The largest single attorneys' fee award to date was $688 million, doled out in 2008 in the Enron case.  In second and third place was $492 million in fees resulting from Tyco litigation and about $336 million in fees in the WorldCom case. 

This is the second time NALFA has been cited by Thomson Reuters. In 2011, NALFA was quoted on a news story concerning legislation on fee objectors in New York.  See “NALFA in News: Quoted As Industry Source in Reuters News”

Attorney fee disputes are often a result of a breakdown in the attorney-client relationship.  Mediation is the quickest, simplest, and most cost effective way to resolve attorney fee disputes.  NALFA offers a mediation program specifically designed for attorney fee disputes of all sizes.

Our fee dispute mediators are uniquely qualified to sit down with both parties and settle a fee dispute in a cost effective and confidential manner.  Our fee dispute mediators are trained to handle simple attorney-client fee disputes and larger, more complex multi-party fee disputes.  Our fee dispute mediators are trained neutrals who understand the underlying issues in fee dispute cases.  They include former judges, seasoned litigators, and in-house counsel.  NALFA uses a customized approach for each fee dispute case.

“Attorneys don’t want to be in the business of suing clients over unpaid fees.  So before filing a suit in court, attorneys should attempt fee dispute mediation.  In fact, participating in fee dispute mediation, in good faith, can only strengthen your legal action in court, if the case is not resolved in mediation,” said Terry Jesse, Executive Director of NALFA.

According to a May 22, 2012 article in Corporate Counsel Magazine, “…as the next generation of general counsel takes charge, evaluations of outside counsel will rely more and more on metrics assessing efficiency and productivity.”

Whenever NALFA member and attorney fee expert Ken Moscaret, Esq. opines in support of the efficiency of multimillion-dollar legal fees billed by major law firms in large, complex litigation, he customarily focuses on five court-tested factors:

1. Concentration of workflow in the hands of a core team of attorneys
2. Appropriate mix of attorneys by skill, experience, and ability
3. Delegation of workflow to less-expensive but competent timekeepers
4. Case staffing continuity
5. Exercise of billing judgment

As one example, in the Enron litigation in 2008, the presiding federal judge cited and relied in part on Mr. Moscaret’s “efficiency factors” to support her record-setting $700 million fee award in that case to a large, well-known California law firm, as follows:

“[Mr.] Moscaret also examines the fee request for “efficient” case staffing, i.e., using as few attorneys as necessary doing as much of the legal work on a case as possible.  In large complex cases like this one, he looks for a ‘tight compact litigation team of attorneys doing the majority of the work on the case,’ i.e., ‘core’ attorneys billing at least 75% of the hours on the case… He also identifies and discusses in detail other indicia demonstrating reasonableness and efficiency of overall staffing in this litigation, including an appropriate mix of attorneys for the demands of a complex litigation, reasonable delegation of work flow, continuity of case staffing,…” 586 F.Supp.2d at 785.

NALFA’s Law’s Top Civil Litigators is a new membership category for a select group of plaintiffs’ lawyers who’ve achieved record settlements and verdicts in areas of tort litigation: consumer, personal injury, environmental, employment, and securities.  Nomination is based on results obtained for the client and the community.  Our motto is “Winning for the Client and the Community.”

Law’s Top Civil Litigators will be among the first to put their lawyering stats on a baseball card.  Members will be able to choose from 4 different baseball card style formats.  On the front, lawyers will be pictured “in action” or a simple head shot with name, firm name and logo, along with position in the firm. 

On the back, lawyers can display lawyering stats such as year, case name, type of case, court, and settlement and/or verdict amount.  Like baseball cards, we’ll also include other biographical information such as law school, court admissions, and contact information.  And because this is a “virtual” baseball card, users will be able to click on the stats to learn more case details.

This new app, (for online, ipad, iphone, and android users), is an effective way for plaintiffs' lawyers to promote their record of success in a familar format.  “This new app is a simple, fun, and familar way for trial lawyers to share their winning record with potential clients, the media, and others in the legal profession,” said Terry Jesse, Executive Director of NALFA.

Beyond this new app, Law’s Top Civil Litigators is also a pro-plaintiffs’ advocacy group that seeks to combat the efforts of the tort reform lobby.  “There are scores of positive stories from the plaintiffs' bar.  We want to promote these positive cases at a national level and correct much of the misinformation from the tort reform lobby,” said Jesse.

For more information, please call Terry Jesse at 312.854.7158 (direct) or e-mail terry@thenalfa.org.

Disclaimer: NALFA owes the creative concept, proprietary rights, and all technology associated with this app.

Last Friday, the Republican controlled U.S. House held hearings on cy pres awards in class action litigation.  Cy pres awards are final surplus funds left over from class action cases.  The tort reform lobby seeks to repeal cy pres awards under the Class Action Fairness Act of 2005 (CAFA). 

During a hearing by the U.S. House Subcommittee on the Constitution, Northwestern Law Professor Martin Redish testified about the problems with such awards, saying class members are unaware of the lawsuit or can’t be found, or the award is so small that it doesn’t make sense for them to seek payment.

According to the U.S. Chamber of Commerce’s Institute for Legal Reform, cy pres awards in class actions help pump up attorney fees for plaintiffs’ lawyers.  Testifying last week from the Institute’s viewpoint was John Beisner of Skadden Arps.  Beisner said cy pres awards help inflate the size of the award and justify higher attorney fees.

"At NALFA, we oppose the repeal of cy pres awards under the Class Action Fairness Act.  Unclaimed funds in class actions are better served with charities and non-profits than returned to the defendants, the very individuals who just conceded wrongdoing.  This is like allowing a bank robber to keep some of the stolen money after he's been found guilty," said Terry Jesse, Executive Director of NALFA.

This week a WSJ article, “Should Lawyers Get Paid for a Win Without a Fight?” by Peg Brickley takes issue with large fee awards earned in securities class actions.  The answer to Peg’s question is…YES!

In her article, Peg takes issue with a handful of shareholder suits filed in Delaware’s Court of Chancery.  She asks weather plaintiffs’ lawyers representing shareholders deserve “hefty fees” for filing suits that resulted in quick changes to company bylaws.

“Attorney fee awards are determined, in part, by the results they achieve.  Is it any surprise that winning big settlements (and/or verdicts) earn big attorney fees?  Of course not, it's simple economics.  Because a settlement was achieved quickly only adds to the value of the case,” said Terry Jesse, Executive Director of NALFA.   “The efficient work of the plaintiffs’ lawyers resulted in benefits to shareholders; that should earn them significant compensation," Jesse concluded.

The Republican controlled Michigan House of Representatives introduced legislation that would limit attorney fee compensation in civil litigation.  The proposed law would restrict any attorney from contracting with a client on a contingency fee basis, if his/her fees exceed $1 million.

The 2-page legislation, House Bill No. 5702 (pdf), would cap attorney fees at $1 million for all personal injury and wrongful death cases.  The proposed legislation reads: “the attorney shall not receive, retain, or share a fee that is more than $1,000,000, regardless of the percentage of the amount recovered involved.”

"At NALFA, we are opposed to this legislation.  Two private citizens should be able to contract without government interference.  The right to contract is not only one of the principles of our free market economy, but it is one of the hallmarks of the attorney-client relationship," said Terry Jesse, Executive Director of NALFA.

A recent Sun Herald story, “High Court: Legal Fees are Public Funds,” reports that the Mississippi Supreme Court ruled last today in two cases that legal fees paid to private lawyers to represent the state are public funds.  Justices said because the money belongs to the public, it should’ve been paid out to lawyers from the attorney general’s contingent fund or from other money appropriated to the attorney general.

In 2010, a Hinds County judge ruled the $14 million in attorney fees paid to two attorneys for handling a state lawsuit against telecommunications giant MCI was properly handled.  Another Hinds County judge ruled the same case in 2010 involving $10 million in attorney fees paid to lawyers for handling a state lawsuit against computer software maker Microsoft.

The Supreme Court rejected arguments from Mississippi Attorney General Jim Hood and the attorneys involved in the cases that the attorney fees were property of the lawyers, not the state.  The Supreme Court said the settlement funds paid by MCI and Microsoft belong to the state.  The court said state law clearly “mandates that outside retained by the attorney general can be paid only from the attorney general’s ‘contingent fund’ or from funds appropriated to the attorney general by the Legislature.”

“That is where it must be paid – and distributed,” wrote Presiding Justice Jess Dickinson.  “The statute does not allow direct payment of attorney fees.”  But Justice Jim Kitchens said the law firms had a valid contract with the state and were entitled to their fees being paid from the settlement.  Kitchen said a better approach would have been to submit all of the settlement proceeds to the attorney general, have him deposit them into his contingency account and then write a check to the law firms.

Hood said the private attorneys’ fees are part of the settlement of the lawsuit and should not be counted in the money the state receives.  Hood enters into contracts with private attorneys when his office does not have the expertise, resources, or staff to pursue the litigation.

CLICK HERE to read the Miss. Supreme Court decision

Today, Republican Governor Phil Bryant signed into law restrictions on the state’s use of outside, contingency fee lawyers.  The “sunshine” law would require all outside counsel representing the state to keep detailed time and expense records and limit contingency fee lawyers to a total fee of $50 million.

The law imposes hourly rates not exceed “recognized bar rates” (whatever that means).  The bill imposes strict limits on contingency fee awards.  Attorney fees are limited to 25% of a $10 million recovery, 20% for amounts between $10 million and $15 million, and only 5% for amounts over $25 million with a cap of $50 million.  The state will also establish an Outside Counsel Oversight Commission to review contingency fee contacts and require those contracts to be posted on the AG’s website.

Mississippi Attorney General Jim Hood’s office is considering challenging the constitutionality of the new law in court.  In a statement (pdf) Hood’s office projects the bill will cost the State about $11 million a year because the average private lawyer is paid $145 per hour and the AG only charges $65 per hour for the same services and that difference will be paid for by Mississippi taxpayers. The current system works. Over the past 7 years Jim Hood’s office has recovered over $500 billion for the taxpayers of the state and it did not cost the taxpayers a single dime. In addition, the law of the state already allows state agencies to file suit should the attorney general decline, or file suit even if the attorney general opposes such.

“Mississippi Attorney General Jim Hood is one of the most successful attorneys general in U.S. history. He was one of the first AGs to bring a suit against the tobacco companies. Throughout his career, he has taken on powerful industries such as insurance companies, big tobacco, and drug companies. Hood has tallied up record settlements against a host of corporate wrongdoers including Entergy, State Farm, MCI/World Com, and BP, thus securing hundreds of millions of dollars for Mississippians,” said Terry Jesse, Executive Director of NALFA.

A Washington, DC-based tort reform lobby group, American Tort Reform Association (ATRA), wrote legislation that would limit Mississippi Attorney General Jim Hood’s power to hire outside lawyers.  The legislation, H.B. 211 (pdf), would allow state agency heads to hire private attorneys instead of relying on the AG’s office to represent their interests, as well as requiring attorneys who bill the state for more than $100,000 to have those amounts published.  The bill also requires outside counsel to keep detailed records of the time spent working on cases and expense reports.

“Mississippi Attorney General Jim Hood is one of the most successful attorneys general in U.S. history.  He was one of the first AGs to bring a suit against the tobacco companies.  Throughout his career, he has taken on powerful industries such as insurance companies, big tobacco, and drug companies.  Hood has tallied up record settlements against a host of corporate wrongdoers including Entergy, State Farm, MCI/World Com, and BP, thus securing hundreds of millions of dollars for Mississippians,” said Terry Jesse, Executive Director of NALFA.

In a statement (pdf), Hood’s office said the bill is unconstitutional.  Hood’s office projects the bill will cost the State about $11 million a year because the average private lawyer is paid $145 per hour and the AG only charges $65 per hour for the same services and that difference will be paid for by Mississippi taxpayers.  The current system works.  Over the past 7 years Jim Hood’s office has recovered over $500 billion for the taxpayers of the state and it did not cost the taxpayers a single dime.  In addition, the law of the state already allows state agencies to file suit should the attorney general decline, or file suit even if the attorney general opposes such.

A recent AM Law Daily story, “When It Comes to Billing, Latest Rate Report Shows the Rich Keep Getting Richer,” reports that hourly rates just keep rising—and the best paid lawyers are rising their rates faster than everyone else.   Those are two key findings contained in the 2012 Real Rate Report, an analysis of $7.6 billion in legal bills paid by corporations over a five-year period ending in December 2011.  The report, released Monday, is the second such collaboration between TyMetrix, a company that manages and audits legal bills for corporate legal departments and the Corporate Executive Board.

Many of the new rate report’s findings echo those contained in the 2010 study, including the fact that rates keep going up, almost across the board, and that the cost of a given matter can very dramatically depending on a law firm’s size and location and its relationship with a particular client.  At the same time, this year’s study shows the legal sector is becoming increasing bifurcated, with top law firms rising rates faster than those at the bottom of the market and large firms changing a premium price based purely on their size.

“It’s no surprise that defense fees have ticked up,” said Terry Jesse, Executive Director of NALFA.  “The rates are keeping in-line with the demand, especially for the very best in the field.  Generally speaking, I would expect rates to rise less rapidly and/or and increase in alternative fee arrangements in both transactional and litigation matters when demand levels off,” Jesse concluded.

On March 22, 2012, the U.S. House passed a measure to limit attorney fees in medical malpractice cases.  The legislation, H.R. 5 (pdf), passed on a largely partisan 223-181 vote.  In addition to limiting contingency fees for lawyers, the legislation would cap awards in medical malpractice claims for pain and suffering at $250,000 in most states.

“Republicans say they support our free enterprise system, yet they want to limit what attorneys can earn in medical tort cases,” says Terry Jesse, Executive Director of NALFA.  “We are opposed to legislative efforts to cap attorney fee awards in tort cases.  In our civil justice system, judges should determine reasonable fee awards, not politicians,” Jesse concluded.

In today’s litigation practice, the economics of attorney fees has never been more important.  Attorney fee litigation is at unprecedented levels.  More and more law firms are suing former clients to collect unpaid legal bills and more clients are suing law firms for overbilling claims than ever before.  That, added with the rise of “loser pays” fee-shifting litigation, the growing body of court awarded attorney fee jurisprudence, attorney fees themselves have become a highly specialized practice area.

NALFA announces a first-of-its-kind practice group specifically devoted to attorney fee issues, The Attorney Fee Practice Group.  The Attorney Fee Practice Group is a highly specialized, niche practice area within the legal profession dedicated to attorney fee and legal billing matters.  Members of the Attorney Fee Practice Group are retained by law firms and clients when attorney fees are at issue.  Members of NALFA’s Attorney Fee Practice Group are qualified attorney fee experts, fee dispute arbitrators, and legal bill auditors.

Our attorney fee experts are retained by some of the nation’s top law firms to provide expert reports, opinions, and testimony on the reasonableness of attorney fees in large, complex underlying litigation and transactional matters.  Our fee experts are retained by attorneys to both support or challenge fee requests in court.  As fact-finders, trial judges have relied on, and often cite our fee experts favorably in their fee award rulings.  Our fee experts can provide fee-seeking lawyers the prevailing market knowledge to succeed in court, including, but not limited to:

Reasonable, Prevailing Market Rates
Reasonableness of Hours Billed
Customary Law Firm Billing Practices
Billing Judgment
Amount at Stake in Underlying Case vs. Amount of Legal Fees Spent
Novel, Complex, or Unusual Legal Issues in Underlying Case
Successful Results Obtained for the Client
Skill, Experience and Reputation of Law Firm
Efficient Litigation Management Practices

Last week, the Missouri Legislature introduced a bill that would implement the so-called “loser pays” English Rule and undo centuries of jurisprudence under the American Rule in civil litigation.  But the one-page “loser pays” bill is no English Rule at all.  The bill is a one-way fee-shifting rule that applies only one party, not both parties.

The legislation, H.B. 1342 (pdf), would only apply to non-prevailing (i.e. losing) plaintiffs, not to non-prevailing (i.e. losing) defendants.  In other words, only plaintiffs would be forced to pay the attorney fees of defendants, if they don’t prevail in underlying civil litigation.  The bill would not require losing defendants to pay the attorney fees of prevailing plaintiffs.  “It’s not fair to implement a one-way fee-shifting provision to apply only to one party,” said Terry Jesse, Executive Director of NALFA

On February 2, 2012 the U.S. House of Representatives Judiciary Subcommittee on the Constitution held a hearing on “Contingency Fees and Conflicts of Interest in State AG Enforcement of Federal Law.”  At the hearing, three people testify:  Bill McCollum, a partner of SNR Denton’s Public Policy and Regulation Practice Group, Amy Widman, Assistant Professor of Northern Illinois University Collage of Law, and James R. Copland, Director and Senior Fellow of Manhattan Institute for Policy Research.

"The 'tort reform' lobby (i.e. U.S. Chamber of Commerce) is targeting this for one reason; it’s working.  Private lawyers have been effective in helping states reach huge settlements on behalf of their citizens," said Terry Jesse, Executive Director of NALFA.  “It makes sense for underfunded and understaffed AG offices to contract with outside law firms to represent citizens of their state against large-scale consumer abuses.  Working on a contingency fee basis actually protects taxpayers and ensures the people of their state are well represented against  well-funded industries,” Jesse concluded.

There’s been no legislation produced from this hearing, but in his testimony, Copland said that Congress should take a “modest step” and codify Executive Order 13433 (pdf).  Executive Order 13433 was signed by President George W. Bush and prohibits federal agencies from entering into contingency fee agreements with outside counsel.  In other words, Copland would have the federal government dictate to all state attorneys general what type of fee arrangement they may enter into with outside counsel.

CLICK HERE for a link to a video of the hearing.

In today's litigation practice, the economics of attorney fees has never been more important.  Attorney fee litigation is at unprecedented levels.  More and more law firms are suing clients to collect unpaid legal bills and more clients are suing law firms for over billing claims than ever before.  That, added with the rise in "loser pay" fee-shifting litigation, and the growing body of court awarded attorney fee jurisprudence, attorney fees themselves have become a highly specialized practice area.

Join the first-of-its-kind practice group specifically devoted to attorney fee issues, the Attorney Fee Practice Group.  The Attorney Fee Practice Group is a highly specialized, niche practice area within the legal profession dedicated to attorney fee and legal billing matters.  Members of the practice group are retained by law firms when attorney fees are at issue in underlying litigation.  Members of the Attorney Fee Practice Group are qualified attorney fee experts, fee dispute arbitrators, and legal bill auditors.

At NALFA, we project the attorney fee practice area to not only continue to grow, but expand in new areas.  Secure your place in the Attorney Fee Practice Group.  Benefits include:

Member-to Member Referral Program: Members of our Attorney Fee Practice Group can turn to one another when a conflict arises.  Our members can exchange attorney fee and legal billing cases with one another and refer clients to one another when an ethical, business, or scheduling conflict arises.

Certificate of Qualification: Upon membership, members of our Attorney Fee Practice Group will receive a professional certificate that bears their name (or company’s name) for display purposes.  This certificate of qualification shows that they are a member in good standing and have met the standards of excellence for selection in their respective member category.  This professional certificate is individualized, printed in full-color and on high-quality stock paper.

Updates on Attorney Fee & Legal Billing Jurisprudence: All NALFA members will receive periodic e-mail updates on the latest developments on important attorney fee and legal billing jurisprudence.  These e-mail updates summarize attorney fee and legal billing cases in both state and federal courts from across the U.S. and include both published and unpublished court decisions.

Customized Profile Page in On-Line Membership Directory: NALFA members will be provided their own profile page in our on-line membership directory to list their professional qualifications and experience on attorney fee and legal billing matters.  Members can customize their profile to include hyperlinks, white papers, articles, and news.  This on-line directory also allows potential clients to contact you directly on attorney fee and legal billing matters.

Promote News in Attorney Fees Blog: NALFA members can promote news on our Attorney Fees Blog.  Members can take advantage of reaching a national audience by posting news, articles, and announcements in NALFA’s Attorney Fees Blog, a heavily trafficked site and a great source for attorney fee and legal billing news.

Professional Development: Our CLE programs are the perfect opportunity to build on your knowledge of attorney fee and legal billing issues.  By attending our CLE programs, members benefit professionally with the very latest case law and developments on attorney fee and legal billing jurisprudence.

Speaking & Publishing Opportunities: Members are invited to participate in our CLE programs as sponsors and panelists.  By participating in our CLE programs, members not only help develop program content, but also help shape the growing body of attorney fee and legal billing jurisprudence.

Networking Opportunities: Our members build lasting relationships with fellow members, colleagues, peers, and clients by networking at our events.  Networking with other fee and billing experts, consultants, and clients is an excellent way to build new lines of business and expand your area of expertise.

Marketing Project Opportunities: NALFA can work directly with members on marketing projects.  We can market your practice and promote your area of expertise.  Through our e-mail database, members can reach a desired audience to promote news or to make special announcements.  NALFA charges a separate marketing fee for this service.

If you are interested in joining, please contact us at 312-907-7275.

A recent The Wall Street Journal blog story, “How Much is $300 Million in Attorneys’ Fees?”, recognizes NALFA as the industry source for attorney fee and legal billing matters.  The Wall Street Journal is one of the nation’s most respected newspapers and an authoritative news source on business and financial information.

The Wall Street Journal turned to NALFA for information on the largest class action attorney fee awards in U.S. history.  This is not the first time NALFA has been cited by the national press.  In September 2011, NALFA was quoted in a Thomson-Reuters story, "Cuomo Considering Law Change on Class Action Attorneys' Fees". 

“We are pleased to be recognized by the WSJ as the industry source on attorney fee and legal billing issues,” said Terry Jesse, spokesman for NALFA.  “We were happy to provide the WSJ with the information and look forward to working with other media outlets in the future,” Jesse concluded.

The National Association of Legal Fee Analysis (NALFA) is working to establish a professional certification program for the attorney fee and legal billing community in 2012.

“As a 501(c)(6) professional organization, it’s important to establish a certification program for the attorney fee and legal billing community.  This will ensure creditability and reliability in the field.  As a 501(c)(6) professional association, we have a professional obligation to ensure attorney fee experts, fee dispute arbitrators, and legal bill auditors are qualified in their respective field,” said Terry Jesse, Executive Director of NALFA. 

"Certification programs are not implemented overnight and are not done without the input and cooperation of professionals within the field.  We look forward to working with members to identify standards for certification,” Jesse concluded.

In today's litigation practice, the economics of attorney fees has never been more important.  With the rise in attorney fee-shifting litigation, to the growing body of attorney fee law, attorney fees have become a highly specialized practice area.

Packed with over 100 pages of substantive material on attorney fee and legal billing jurisprudence, The Attorney Fees Conference Course Book provides useful and practical information on the economics of attorney fees in complex cases.  Topics include:

Court Awarded Attorney Fees in Prevailing Party Litigation
Class Action Litigation & Attorney Fee Awards
Attorney Fee Issues in Chapter 11 Bankruptcy Proceedings
Insurance Coverage Litigation: Who Pays the Legal Bills?
Reviewing Legal Bills for Reasonableness
Dispute Over Legal Fees: Litigation vs. Arbitration

CLICK HERE for Course Book Order Form

On November 17, 2011, NALFA hosted The Attorney Fees Conference at Loyola Law School in Los Angeles.  The conference featured 3 sitting judges, top trial lawyers, and attorney fee experts covering a range of complex issues on attorney fee and legal billing matters in a number of litigation areas.

California Attorney’s Fees reported on the conference.  For more information on each panel discussion, please click on link below. 

Attorney Fees in Prevailing Party Litigation

Class Action Litigation & Attorney Fee Awards

Attorney Fee Issues in Chapter 11 Bankruptcy Proceedings

Insurance Coverage Litigation: Who Pays the Legal Bills?

CLICK HERE for Course Book Order Form.

In today's litigation practice, the economics of attorney fees has never been more important.  With the rise in fee-shifting litigation and the growing body of attorney fee law, attorney fees have become a highly specialized practice area.  Whether you're seeking to recover fees in court or to adjudicate a fee dispute with a former client, today's litigators require both substantive and procedural knowledge of attorney fee jurisprudence.  In fact, pursuing the right attorney fee strategy from the outset can often mean millions of dollars more (or less) in attorney fees.

This seminar provides useful and practical information on the economics of attorney fees in complex cases.  From achieving prevailing party status, to well-documented fee requests, to allocation issues, to rates and billing issues, the Attorney Fee Conference 2011 covers a range of complex attorney fee issues in a number of underlying litigation areas.  This conference is widely regarded as the nation's largest and most comprehensive program on attorney fees.  The program includes a course book with over 100 pages of substantive material on attorney fees matters.

You will hear from top attorney fee experts, trial lawyers, and sitting judges on:

• Court Awarded Attorney Fees in Prevailing Party Litigation
• Class Action Litigation & Attorney Fee Awards
• Attorney Fee Issues in Chapter 11 Bankruptcy Proceedings
• Insurance Coverage Litigation: Who Pays the Legal Bills?
• Reviewing Legal Bills for Reasonableness
• Disputes Over Legal Fees: Litigation vs. Arbitration

In today's litigation practice, the economics of attorney fees has never been more important.  With the rise in fee-shifting litigation and the growing body of attorney fee law, attorney fees have become a highly specialized practice area.  Whether you're seeking to recover fees in court or adjudicate a fee dipsute with a former client, today's litigators require both substantive and procedural knowledge of attorney fee jurisprudence.  In fact, pursuing the right attorney fee strategy from the outset can often mean millions of dollars more (or less) in attorney fees.

This seminar provides useful and practical information on the economics of attorney fees in complex cases.  From achieving prevailing party status, to well-documented fee requests, to allocation issues, to rates and billing issues, The Attorney Fees Conference - 2011 covers a range of complex attorney fee issues in a number of underlying litigation areas.  This conference is widely regarded as the nation's largest and most comprehensive program on attorney fees.  The program includes a course book with over 100 pages of substantive material on attorney fee matters.

For more information or to register, visit http://www.thenalfa.org/CLE-Programs/

NALFA hosts The Attorney Fees Conference - 2011, the nation's largest conference on attorney fees, on November 17, 2011 at Loyola Law School in Los Angeles.  The program includes three sitting judges. 

For more information or to register visit http://www.thenalfa.org/CLE-Programs/

Last Tuesday, The Subcommittee on Courts, Commercial and Administrative Law of the Judiciary Committee in the U.S. House held hearings on The Government Litigation Savings Act (H.R. 1996) (pdf).  Georgetown University Law Professor Brian Wolfman gave testimony (pdf) opposing the proposed legislation, which would cap attorney fees in EAJA litigation.  Below is a blog post of the Consumer Law & Policy Blog on October 11:

H.R. 1996: Undermining the Equal Access to Justice Act

The Equal Access to Justice Act (EAJA) is a fee-shifting statute that applies in litigation and certain adversary administrative proceedings against the federal government when no other fee-shifting statute applies. It is used mainly in social security and veterans disability cases and administrative law cases under the Administrative Procedure Act. It is used by small businesses as well, such as in government contract disputes.

As with most fee-shifting statutes, the fee applicant may receive an award when it has prevailed in the case. But EAJA is less generous than most fee-shifting statutes for a number of reasons, the most important of which are (1) that the government can avoid a fee request, even if it has lost, if it can show that its position on the merits was reasonable, and (2) fees are awarded at well below market rates.

Enter H.R. 1996. It would make EAJA a dead letter in many cases. First of all, it would make EAJA inapplicable unless the plaintiff is seeking monetary relief in the case. So, no EAJA fees for cases seeking to enjoin or otherwise alter government regulations or conduct. Second, under H.R. 1996, no fee would be awarded where the legal services were provided pro bono -- well that's most litigation filed by non-profits groups and lots of cases brought on behalf of people claiming that they were wrongfully denied government benefits.

That's not all. To learn about all of H.R. 1996's problems, read this testimony I gave today before a House Judiciary subcomittee. It's interesting how times change. The last time I testified on EAJA in 1994, it was thought that Congress might make EAJA better by making it more like other fee-shifting statutes. Now, the effort is to save it.

A recent madison.com story, “Crime and Courts: More ‘Tort Reform’ Bills Coming From the GOP” reports that recent legislative efforts by Wisconsin State Sen. Rich Zipperer places attorney fees on the front burner as the Republican majority attempt to enact tort reform similar to that which took place in Michigan 15 years ago.  Trial lawyers are opposing the measures, arguing that certain provisions deny injured parties their day in court.  “If this becomes law, all of those people who are injured, or the families of people who die, will just be (out of luck) says Mike End, the president of the trial lawyers group Wisconsin Association for Justice.

The proposed legislation (pdf) would limit attorney fees to three times the amount of compensatory damages awarded.  “We oppose politicians imposing caps on attorney fee compensation,” says Terry Jesse, executive director of NALFA.  “We work in a free market economy, where clients and attorneys are free to contract with one another without politician or government interference.”  Jesse concluded, “Judges determine reasonable attorney fee awards, not politicians.”

A Thomson Reuters News story, “Cuomo Considering Law Change on Class Action Attorneys’ Fees”, reports that lawyers in New York who successful challenge class action settlements on behalf of individual plaintiffs could be entitled to attorneys’ fees, if Gov. Andrew Cuomo signs a bill currently before him.  The measure, which would reverse a 1975 law, would allow courts to award fees to anyone whose work benefits an entire class – for example, a lawyer who negotiates an increase in the total amount of a settlement.  The current law reserves attorneys’ fees only for “representatives of a class,” which courts have interpreted to exclude lawyers who represent “fee objectors,” those class members who disagree with specific terms of the settlement, such as the amount of the settlement or attorneys’ fees.

A 2010 ruling by the Court of Appeals highlighted the issue and generated the push for the proposed legislation.  In the case, Fleming v. Barnwell Nursing Home, which involved a class of 242 plaintiffs with claims of wrongful death, the defendant nursing home settled for $950,000, $448,000 of which was pegged for attorney fees and expenses.  After the executor of one class member’s estate objected to the fees, an appellate court reduced them to $425,000.  But when the fee objector applied for fees for negotiating the reduction, the Court of Appeals denied him fees, citing the 1975 law.  (For more information on this case visit NALFA Attorney Fees Blog story “Class Action Fee Objectors Face Set Back in New York Courts”)

Proponents say the new law would encourage members of the class to raise objections, and thus make it harder for class action defendants to craft “coupon settlements,” in which they provide plaintiffs with a token award, such gift coupon, without addressing their grievances.  There is some concern that the new legislation, if passed could clog up the courts with spurious objections, particularly in high-profile class action suits.  “There could be more [fee] objectors coming out of the woodwork and trying to muck up a settlement process,” said Terry Jesse, the executive director of the Chicago-based National Association of Legal Fee Analysis.  But Jesse also noted that because the measure would preserve the discretion of judges in doling out awards, it could keep unreasonable objections to settlements in check.

NALFA has joined the social media world on Facebook, Linkedin, and Twitter.  For professionals, social networking is an excellent way to develop contacts, promote services, and share information within a professional community.  This new social media allows attorneys and others interested in attorney fees and legal billing issues to interact, comment, and share information.

“Social media is changing the way people interact with one another and with organizations, and the way they get their news,” said Terry Jesse, Executive Director of NALFA.  “These initiatives will allow us to not only relay information more frequently, but also to better engage and connect with our members, clients, and other parties interested in attorney fee and legal billing issues.”

CLICK HERE to like us on Facebook

CLICK HERE to join our NALFA Group on Linkedin

To follow us on Twitter visit http://twitter.com/#!/AttorneyFees

Outside legal bill auditors are often retained by insurance carriers, law firms, corporations, government agencies, and municipalities to review legal invoices in underlying litigation or transactional matters.  No two legal auditing programs are the same.  Legal bill auditing is part art and part science.  Here are a few questions clients should ask legal bill auditors:

• Is your legal auditing program certified by NALFA?
• Is your legal bill review process manual or computerized?
• Do you do quantitative or qualitative analysis?
• Do your legal bill auditors participate in professional development programs?
• What is your turnaround time?
• Will you back the legal audit results with expert testimony, if needed?
• Do you look at the legal invoices alone or the work product as well?
• Who reviews the bills (i.e. attorneys, paralegals, accountants)?
• Do your legal bill auditors keep up with the latest attorney fee and legal billing jurisprudence?

• Are you certified by NALFA?
• Do you participate in professional development programs?
• Do you keep up on the latest attorney fee and legal billing jurisprudence?
• Have you been published or a panelist on attorney fee or legal billing matters?
• Have you testified on reasonable attorney fees?
• Can I see your experience and qualifications listed on NALFA’s membership directory?

NALFA is hosting the Attorney Fees Conference -2011 on November 17, 2011 (Noon-5pm) at Loyola Law School in Los Angeles. 

The Attorney Fees Conference – 2011
Loyola Law School
Los Angeles, CA
November 17, 2011
Noon-5pm

For more information or to register visit http://www.thenalfa.org/CLE-Programs/

NALFA has established the only practice group of its kind, specifically devoted to attorney fee and legal billing matters.  Members of NALFA's Attorney Fee Practice Group are defined as follows:

Attorney Fee Expert is a qualified expert who provides expert testimony in court or arbitration on the reasonableness of attorney fees in underlying litigation.  Attorney fee experts are retained by law firms to support or challenge a fee request and/or serve as court-appointed special masters on large, complex fee dispute cases.

Fee Dispute Arbitrator is a trained arbitrator and/or mediator who offers substantive knowledge of attorney fee and legal billing matters.  Fee dispute arbitrators are hired to settle and resolve attorney-client fee disputes in a cost effective and confidential manner.

Legal Bill Auditor is a professional who provides qualitative and/or quantitative analysis (i.e. tables, charts, summaries) of legal tasks performed.  This work is done either manually or by computerized processing.  Legal bill auditors work for insurance carriers, legal auditing firms, law firms, or government agencies.

New legislation entitled the Government Litigation Savings Act (pdf), sponsored by Representative Cynthia Lummis (R-WY) and Senator John Barrasso (R-WY) would limit the amount of attorneys’ fees recovered in lawsuits against the federal government.  The bill (HR 1996 and S 1061) would cap attorneys’ fees and block groups whose net worth exceeds $7 million from filing for payment under the Equal Access to Justice Act (EAJA) of 1980.  According to the bill, all attorney fees will be capped at $175 per hour, the bill would also remove all multipliers, place a $200,000 limit for any single lawsuit, and no more than three EAJA awards in any calendar year can be awarded to the same claimant.

Legal action against the federal government can be very costly and the EAJA authorizes the reimbursement of attorney fees and expenses for prevailing litigants.  If passed, many organizations, especially environmental groups, would not be able to afford to bring important environmental actions against the federal government.  What is more, imposing caps on attorney fees sets a bad precedent.  Attorney fees are compensation.  In a free market economy, it is wrong for the federal government to limit compensation for any one particular profession.  “At NALFA, we believe judges should decide reasonable attorney fees, not politicians,” said Terry Jesse, Executive Director of NALFA.

The trustee, Irving H. Picard of Baker & Hostetler LLP in New York, work in Re Bernard L. Madoff Investment Securities LLC, has produced the following results, thus far:

            Recovered For Investors: $7.6 billion

            Attorney Fees Sought: $175.5 million

For more information visit http://www.madoff.com/

Attorney fees are important.  With the rise in fee-shifting litigation and the growing body of attorney fee jurisprudence, attorney fees have become a highly specialized practice area.  Whether you’re seeking to recover fees in court or to resolve a fee dispute with a former client, today’s litigators are turning to a new practice group for answers.

NALFA announces a first-of-its-kind practice group specifically devoted to attorney fee issues, the Attorney Fee Practice Group.  The Attorney Fee Practice Group is a highly specialized, niche practice area within the legal profession.  Members of the practice group are retained by law firms and appointed by courts when attorney fees are at issue.  Members of the Attorney Fee Practice Group are attorney fee experts and fee dispute arbitrators. 

Our attorney fee experts are retained by some of the nation’s top law firms to provide expert reports, opinion, and testimony on the reasonableness of attorney fees in large, complex cases.  Our fee experts are retained by attorneys to both support or challenge multi-million dollar fee requests in court.  As fact-finders, judges have relied on, and cited our fee experts favorably in their fee award decisions.  Our fee experts can provide fee-seeking attorneys the prevailing market knowledge to succeed in court, including, but not limited to:

• Reasonable, Prevailing Market Rates
• Reasonableness of Hours Billed
• Customary Law Firm Billing Practices
• Billing Judgment
• Amount at Stake in the Underlying Case vs. Amount of Legal Fees Spent
• Novel, Complex, or Unusual Legal Issues in Underlying Case
• Successful Results Obtained for the Client
• Skill, Experience and Reputation of Law Firm
• Efficient Litigation Management Practices

Attorney-client fee disputes are often the result of a breakdown in the attorney-client relationship.  Mediation or arbitration is the quickest, simplest, and most cost effective way to resolve large, complex attorney fee disputes.  Our fee dispute arbitrators are uniquely qualified to settle those fee disputes through the arbitration or mediation process.  Our fee dispute arbitrators have the skills and experience to sit down with both parties to settle a high-stakes fee dispute in a cost effective and confidential manner.

“We’re excited about this new and growing practice area,” says NALFA Executive Director Terry Jesse.  “We look forward to working with law firms and courts when they encounter a large, complex fee dispute,” Jesse added.

Two House Republicans today continued their effort to prevent the plaintiffs’ lawyers in the Cobell class action from getting more than $50 million in attorney fees for their work in the 15-year old case.  Congressmen Doc Hastings of Washington and Don Young of Alaska introduced legislation, H.R. 887 in March.  H.R. 887 establishes a cap of $50 million on attorney fees and expenses on plaintiffs’ attorneys in the class action case, Cobell v. Salazar.

Without any knowledge of the work and hours involved in the 15-year old underlying class action, in a letter (pdf), Congressman Young stated that plaintiffs’ fee request was “grossly excessive.”  Without any knowledge of the factors that determine reasonable attorney fees, in a letter (pdf), Congressmen Hastings stated that plaintiffs lawyers were only seeking to “enrich themselves” at the expense of the client.

NALFA will be registering a corporate Political Action Committee (PAC) with the Federal Election Commission (FEC).  The NALFA PAC will work to defend attorney fee compensation and third-party litigation financing.  The tort reform lobby's (i.e. U.S. Chamber of Commerce) top legislative priorities are to cap attorney fees and prohibit third-party litigation financing.

“We have already seen legislative efforts underway in the Republican-controlled U.S. House to eliminate EAJA payments to attorneys and cap plaintiffs’ fees in class actions cases.  The NALFA PAC will support candidates who believe that judges should determine reasonable attorney fees, not politicians,” says Terry Jesse, Executive Director of NALFA.

1. Dickie Scruggs’ Judicial Bribery Scandal:  Richard “Dickie” Scruggs of Scruggs Law Firm in Oxford, Mississippi was one of the most successful trial lawyers in U.S. history.  Scruggs was a successful plaintiffs’ attorney who amassed hundreds of millions of dollars in asbestos and tobacco litigation.  Worth an estimated $1 billion, Scruggs gave back to the community.  He donated to charities, Ole Miss University, and to political candidates and causes.  But in a fee dispute with former partner Johnny Jones, Scruggs crossed the ethical line.  He attempted to bribe a state judge Henry Lackey with $40,000 in exchange for a judicial order sending the fee dispute case, Jones v. Scruggs, to arbitration.

2. Scott Rothstein’s Ponzi Scheme:  Scott Rothstein of Rothstein Rosenfeldt & Adler (RRA) in Fort Lauderdale, Florida operated a $1.2 billion Ponzi scheme.  Unbeknownst to others in his law firm, Rothstein sold settlements that did not exist to wealthy investors.

3. Kentucky’s Fen-Phen Lawyers:  Kentucky’s Fen-Phen lawyers took nearly $94 million from their client’s settlement funds.  William J. Gallion and Shirley A. Cunningham, Jr. did not tell their clients about a $200 million settlement in the Fen-Phen class action litigation.  In addition, they convinced each plaintiff to accept a low value for their claim by withholding facts about the settlement and threatened imprisonment to plaintiffs who revealed their individual settlement amount to others.

4. Milberg Weiss’ Class Action Plaintiff Kickback Scandal:  For over two decades, securities class action powerhouse Milberg Weiss, LLP participated in a scheme whereby the firm paid out over $11.3 million in kickbacks to clients who agreed to serve as plaintiffs in class action lawsuits.  Prompting its own clients to file the first lawsuit in a class action meant that the firm would control the litigation as lead counsel, a position that guaranteed it the highest percentage of attorney fees from a settlement or judgment.

5. Marc Dreier’s Ponzi Scheme:  Marc Dreier was the sole equity partner of Dreier, LLP in New York.  He defrauded investors of nearly $400 million in a Ponzi scheme, where he successfully convinced hedge funds to invest in a company belonging to his former client, Sheldon Solow.  His former client, Sheldon Solow and members of his own law firm had no idea what Dreier was doing.

The U.S. Congress recently approved legislation known as H.R. 847 James Zadroga 9/11 Health and Compensation Act.  Now, lawyers for those injured while responding to the September 11 terrorist attacks in New York and Washington will only receive 10% for any settlement achieved on their clients’ behalf.  The attorney fee provision in the legislation would also include a special master, who would be able to reduce attorney fees that he or she determines to be excessive.  The cap on attorney fees was championed by many conservative Republicans, led by Senator Tom Coburn (R-OK), as well as the tort reform lobby.

NALFA is opposed to caps on attorney fees.  “Reasonable attorney fees should be determined by judges, not politicians,” says Terry Jesse, Executive Director of NALFA.  “Attorney fees are not gifts; they are compensation for legal services performed.  It’s troubling that politicians in Washington are limiting compensation in a free market economy.  These caps violate the principles of our free market economy.  Aren’t Republicans supposed to be for the free market economy?” Jesse wondered.

Attorney fee expert Ken Moscaret, Esq., a NALFA member, has been retained by policyholder law firms to testify regarding the reasonableness of multimillion-dollar underlying defense fees at issue in large, complex insurance recovery actions.  Recent examples include environmental contamination/toxic tort, asbestos, and securities fraud cases.

ENVIRONMENTAL COVERAGE LITIGATION

• Policyholder fee expert in 2010 in Los Angeles federal court coverage action involving $25 million in defense fees in large, complex underlying environmental contamination/toxic tort litigation.  Expert report submitted.
• Policyholder fee expert in 2010 in Los Angeles state court coverage action regarding $15 million in defense fees incurred in other large, complex environmental contamination lawsuits. 

 ASBESTOS COVERAGE LITIGATION

• Policyholder fee expert in 2010 in two San Francisco/Los Angeles state court coverage actions involving $50 million in defense fees billed in thousands of asbestos lawsuits nationwide. 

SECURITIES FRAUD COVERAGE LITIGATION

• Policyholder fee expert in 2010 testifying in Maryland state court coverage action involving $375 million in defense fees incurred in a series of securities fraud lawsuits nationwide.  Expert deposition given.  Case settled favorably for policyholder on the verge of trial.
• Policyholder fee expert in 2009 in Ohio federal court coverage action regarding $12 million in defense fees in several underlying securities fraud lawsuits.  Expert report submitted.

Mr. Moscaret has testified for both policyholders and insurers in other types of insurance recovery cases, as well.

The National Association of Legal Fee Analysis (NALFA) has joined the social networking world on Facebook.  For professionals, social networking is an excellent way to develop contacts, promote services and products, and share information to others within a professional community.  This new social media platform allows attorneys and others interested in attorney fee and legal billing issues to interact, comment, and share information.

“Social media is changing the way people interact with one another and with organizations, and the way they get their news,” said Terry Jesse, Executive Director of NALFA.  “These initiatives will allow us to not only relay information more frequently, but also to better engage and connect with our members, clients, and other parties interested in attorney fee and legal billing issues.”

CLICK HERE to join our Facebook page.

NALFA has moved into new offices.  NALFA has moved into one of Chicago’s most historic buildings, the 35 East Wacker Drive Building.  This building was known as the Jewelers Building.  The dome at the top of the building was originally a restaurant called the Stratosphere, used as a speakeasy by Al Capone during Prohibition.  Visit http://www.chicagoarchitecture.info/Building/1064/35-East-Wacker-Drive.php for more information.

NALFA’s Executive Director, Terry Jesse says “This is a terrific and very historic building.”  “We’re exciting about being in the heart of Chicago’s legal community,” Jesse adds.  NALFA’s new address is:

NALFA
35 East Wacker Drive
Suite 922
Chicago, IL 60601
(312) 907-7275

According to recent reports by the Associated Press, Republican Governor of Alabama Bob Riley has signed an executive order limiting attorney fees in lawsuits filed by the Alabama Attorney General over the massive BP oil spill in the Gulf of Mexico.  According to the Executive Order (PDF), the Governor’s office must approve any legal contract greater than $195 per hour or contingency fee agreement.

“Ultimately, a cap on attorney fees will hurt the victims of the BP oil spill,” says Aashish Y. Desai of Mower Carreon & Desai, LLP in Irvine, CA.  “You’re not going to get the best qualified attorneys to work on this very important litigation and in the end those whose lives have been devastated by the oil spill will suffer,” Desai adds.

NALFA opposes caps on attorney fees. “Judges should ultimately determine reasonable attorney fees, not politicians,” says Terry Jesse, Executive Director of NALFA in Chicago.  “Attorneys, like other professionals work in our free market economy.  Their hourly rates and contingency fee agreements are subject to the same marketplace conditions that exist for any other profession.  If attorney rates are too high or terms of the fee agreement too much, clients will go elsewhere.  Plus, generally speaking, caps on attorney fees only apply to plaintiffs’ attorneys, thus discriminating against those who bring our nation’s most important public interest cases,” Jesse adds.

Our network of qualified fee experts are retained by some of the nation’s top law firms to provide expert reports and opinions on the reasonableness of attorney fee in large, complex attorney fee disputes.  Our fee experts are retained in 4 key practice areas:

Court Awarded Attorney Fees: In many areas of litigation (i.e. ERISA, intellectual property, class action) attorney fees and expenses are awarded by the court.  Most of these cases are the result of “loser pays” fee-shifting provisions.  Fee-shifting provisions are becoming increasingly common in state and federal statutes as well as in contractual agreements.

Our fee experts are retained to support or challenge attorney fee awards in court.  Our fee experts work with both prevailing and non-prevailing parties.  Our fee experts provide expert reports and opinions so prevailing attorneys can recover their fees.  Our fee experts are also retained by non-prevailing parties to challenge prevailing party fees and expenses.

Tripartite Fee Disputes:  Attorney fee and legal billing disputes often arise out of the tripartite relationship, where you have a third-party payor (i.e. insurance company).  In fact, the question, “who pays the legal bills?” is often a source of litigation.

Our fee and billing experts work with both law firms and insurance companies.  Our attorney fee experts are retained by defense counsel to defend their rates and billing practices in order to recover their fees.  Our legal billing experts are retained by insurance companies to establish systems and programs to better manage defense fees and costs.

Attorney Fee Litigation:  Attorney fee litigation occurs when a law firm sues a former client to collect unpaid legal fees or when a former client sues a law firm for overbilling.  Given the expense of litigation, the attorney fees at stake are usually millions of dollars.

Our fee experts are retained to testify for and against law firm on the reasonableness and necessity of their fees and billing practices.  Our fee experts provide expert reports, opinions, and testimony on the range of factors and variables of reasonable attorney fees and proper billing practices.

Mediate/Arbitrate High-Stakes Attorney Fee Disputes:  Attorney fee disputes are often a result of a breakdown in the attorney-client relationship.  Mediation or arbitration is the quickest, simplest, and most cost effective way to resolve a high-stakes attorney fee dispute.

Our fee experts are uniquely qualified to resolve large, complex attorney fee disputes through a private arbitration or mediation process.  Our fee experts have the skills and experience to sit down with both parties and settle a high-stakes fee dispute in a cost effective and confidential manner.

The NALFA Network Directory is the source for the nation’s best qualified attorney fee and legal billing experts.  Our attorney fee and legal billing experts are retained by some of the nation’s top law firms and insurance carriers to provide expert reports and opinions on the reasonableness of attorney fees in high-stakes attorney fee disputes.  Here’s what clients have said about the NALFA Network Directory in a recent survey:

“The [NALFA Network Directory] will save us time when searching for an outside legal fee/billing expert.  All the information we need is now on one on-line directory.”

“The [NALFA Network Directory] acts as a clearinghouse.  We know the firms and individuals listed are experienced and qualified.”

“The [NALFA Network Directory] has simplified our search for a fee expert or a fee mediator.”

“The A.M. Best’s seal gives me confidence [in the NALFA Network Directory].”

In large, complex attorney fee disputes, clients often turn to a qualified attorney fee expert.  NALFA members are retained by some of the nation’s top law firms and insurance carriers to provide expert reports and opinions on the reasonableness of attorney fees in high-stakes attorney fee disputes.  NALFA members have enjoyed success in the court.  Here are three examples:

Attorney fee expert and NALFA member Brand Cooper of Cooper & Bruning, LLP identified nearly $2 million in unreasonable attorney fees and costs for non-prevailing defendants.  The California court agreed with Cooper’s analysis and cited his expert report and opinions several times in its ruling: “Cooper calculated that 2,798.7 hours of the total 4,937.6 hours in the case were ‘block billing’.  That is nearly 57% of the time entries.  The court will apply an across-the-board 15% reduction in requested fees (after other deductions) based on this impediment to the reasonableness review.”

Attorney fee expert and NALFA member Ken Moscaret of Moscaret Consulting, Inc. successfully testified to a Los Angeles Superior Court judge that over $9 million in fees and costs was reasonable compensation for a major Los Angeles law firm involved in handling a large, complex underlying litigation.  Among his expert opinions, Mr. Moscaret emphasized that there was a rational cost-benefit relationship between the economic value at stake in the underlying litigation versus the legal fees expended.

Attorney fee expert and NALFA member Bruce Meckler of Meckler Bulger Tilson Marick & Pearson, LLP testified (by sworn statement) regarding the reasonableness of legal fees and expenses incurred by Freeborn & Peters, LLP counsel for Brown & Brown, Inc., in Brown & Brown, Inc. v. M.Munawar Ali, Case No. 07 C 2893 in the United States District Court for the Northern District of Illinois, Eastern Division.  In rendering its decision on the reasonableness of legal fees incurred, the Court substantially adopted Mr. Meckler’s opinions.

On June 24, 2010, NALFA hosted the 2nd Annual L.A. Attorney Fee Conference: “It Pays To Be Reasonable” at Southwestern Law School in Los Angeles, California.  The conference featured 10 panelists covering a host of attorney fee and legal billing topics.  The program received great reviews.  Some of the comments included:

“Excellent to get a judicial perspective on attorney fee awards”

“Judge Lichtman provided valuable insight on attorney fees”

“Great topics, outstanding panelists, and a good discussion from the audience”

“I walked away from the program with a better understanding of attorney fees/legal billing issues”

The 2010 L.A. Attorney Fee Conference course book is available for purchase for only $195 plus shipping and handling.  CLICK HERE for course book order form.

To view pictures of the conference, visit our Facebook fan page! 

Lawmakers, Governor Charlie Chist, and Attorney General Bill McCollum handcuffed current and future Florida attorneys general right before the oil spill in the Gulf of Mexico started.  Six days before the Deepwater Horizon rig exploded and the wellhead a mile beneath it began gushing oil, Chist signed into law a cap on attorney fees.  The law that goes into effect July 1, 2010 caps attorney fees at $50 million in contingency cases on contract work for the Office of the Attorney General.

“You’re not going to get the best lawyers to come in on a Dream Team where you’ve capped the attorney’s fees,” said Fred Levin, the renowned Pensacola trial lawyer.  He said preparation and expert witnesses could easily run to $100 million.  McCollum’s law does provide a provision to pay “reasonable costs and expenses,” but it’s not up front.  You may recognize Levin’s name, not only because it graces the University of Florida’s School of Law, but because Levin was the linchpin in the state’s $13 billion big-tobacco settlement.  For his part of the litigation, his firm got $250 million – that’s only part of the $3 billion tobacco companies paid (separately, and without costing the state a dime in attorney fees).

A recent Find Law article, “Caps on Attorney Fees Only Hurt the Injured” provided by Silvers, Langsam & Weitzman, P.C. in Philadelphia opines on recent debate surrounding an amendment to the health care bill that would have limited attorney fees that plaintiffs’ attorney could have collected in medical malpractice lawsuits.  In the amendment proposed by Sen. John Ensign (R-NV), attorney fees would have been limited to one-third of the first $150,000 recovered in any medical malpractice case.  If the damage award exceeded $150,000, then the attorneys’ could receive an additional one-fourth of any amount over $150,000.  For example, if the total damage award was $300,000, then the attorneys would be entitled to a total of $87,500 for their fees.

“Had this measure past, it would have done nothing more than limit the legal rights of victims of medical malpractice.  It is impossible to overstate the importance of contingency fee arrangements in personal injury cases, particularly in medical malpractice suits.  These fee arrangements allow those who otherwise would not be able to afford legal representation to still receive their day in court.  Contingency fee arrangements also allow attorneys to take on costly and risky medical malpractice actions.  It costs a lot of money and takes a lot of time to challenge big insurance companies and health care providers.  Without the possibility of receiving a fair share of the damage award, many attorneys only could afford to take on the most lucrative of the medical malpractice cases – which would limit the access of victims with less serious injuries to the legal system.”

On May 5, 2010 the Internal Revenue Service (IRS) approved the National Association of Legal Fee Analysis (NALFA) as a 501(c)(6) federal tax-exempt organization.  According to the IRS, NALFA meets all the qualifications of a 501(c)(6) business league under the Internal Revenue Code. 

A business league, under the Internal Revenue Code, is organized around a common business interest, which the organization typically promotes.  Business leagues also seek to improve a line of business in a particular field.  NALFA meets all these provisions.

As a 501(c)(6) organization, NALFA is exempt from federal income taxes.  More importantly, as a result of NALFA’s 501(c)(6) federal tax-exempt status, membership dues and contributions to our CLE programs may be tax deductible as a business expense!!!

This week, NALFA registered as a 501(c)(6) tax-exempt organization with the I.R.S.  The 501(c)(6) is reserved for professional and trade organizations (associations and societies) characterized around a common business interest.  501(c)(6) organizations are business leagues specifically designed to promote and improve a particular line of business (i.e. legal fee analysis).  As a non-for-profit business league, annual membership dues and CLE sponsorship contributions may be tax deductible as a business expense, not as a charitable contribution.

L.A. Attorney Fee Litigation Conference: “It Pays To Be Reasonable”
Southwestern Law School
Los Angeles, CA
June 24, 2010
Noon-5pm

It’s back by popular demand!  NALFA is hosting the 2^nd Annual L.A. Attorney Fee Litigation Conference: “It Pays To Be Reasonable” this summer in Los Angeles.  This CLE conference is one of the nation’s most comprehensive programs on attorney fees.  Top trial lawyers, litigators, and attorney fee experts come together to network and discuss the latest issues and developments on attorney fees and legal billing.

Acting on behalf of the attorney fee practice and in the interests of attorney fee jurisprudence, NALFA has filed an amicus curiae brief in the Supreme Court of California in support of the petition for review in Pipefitters v. Oakley.  The brief, written by NALFA panelist Aashish Y. Desai of Mower, Carreon & Desai, LLP in Irvine, California, expresses concern that the Courts of Appeal are conflating two distinct theories for awarding attorney fees.  Desai writes that the decision to require pre-suit settlement notification to receive attorney fees to the substantial benefit doctrine “would come as quite a surprise to most class action fee experts and would render this Court’s decision in Vasquez v. State of California, 45 Cal.4^th 243, 247 (2008) pointless.” 

Desai continues, “In California, the substantial benefit doctrine was ratified and recognized as “well established” by this Court’s analysis in Serrano v. Priest, 20 Cal.3d 25, 38 (1977).  While the private attorney’s general exception may be implicated by the common benefit rationale, it is not the same.  For example, there is no requirement that the attorney’s fees under the substantial benefit doctrine come from a separate fund, nor is there a requirement that the plaintiffs prove that they prevailed in the underlying lawsuit.  The substantial benefit theory is simply rooted on the equitable notion that if you benefit based upon someone else’s hard work, you should have to share in the costs and expense of the labor – no free riders.  This is where Oakley goes wrong.”

The Petition for Review was written by Kevin K. Green of Coughlin Stoia Geller Rudman & Robbins, LLP.

A Los Angeles Superior Court judge ruled recently that over $9 million in Glaser, Weil, Fink, Jacobs, Howard & Shapiro legal fees/costs (formerly known as Christensen, Glaser) was reasonable compensation for handling large, complex underlying litigation.

Attorney fee expert and NALFA member Ken Moscaret, Esq. (who testified successfully in the Enron case in 2008) submitted expert testimony at trial in support of the reasonableness and efficiency of Glaser, Weil's multimillion-dollar fees.

Glaser Weil represented a national bank as a trustee in the underlying litigation. Certain trust beneficiaries later sued the bank, claiming the bank had paid Glaser, Weil unreasonable amounts of compensation for litigation services on behalf of the trust.

Ken Moscaret focused his expert testimony to the L.A. trial court on several "big-picture" fee issues, including the following points:

(1.) The total dollar value potentially at stake in the underlying litigation (involving a well-known waterfront shopping center in San Diego) was many times greater than the actual amount of Glaser, Weil's own fees. Mr. Moscaret opined that there was a rational cost-benefit relationship between the economic value at stake in the underlying litigation versus the legal fees expended.

(2.) Glaser, Weil had repeatedly obtained successful results and outcomes against its opponent in the underlying litigation over the 7-year pendency of the case.

(3.) The underlying litigation was extremely complex and demanding, and required very sophisticated, aggressive lawyering by Glaser, Weil against a tenacious opponent.

(4.) Glaser, Weil's bank client understood how expensive the underlying litigation would be, was kept fully informed and involved in litigation decisions by Glaser, Weil, and approved all of Glaser, Weil's fees.

(5.) Glaser, Weil took concrete, affirmative steps to handle, manage, and staff the underlying litigation in an efficient manner, and exercised billing judgment.

NALFA member and attorney fee expert Brand Cooper helped a California court identify unreasonable attorney fees and expenses in Alma Alfaro v. Nomad Village Inc. The prevailing plaintiffs were seeking over $2.5 million in fees and expenses including a 2.0 lodestar multiplier. Brand Cooper of Cooper & Bruning, LLP in Pasadena, California was retained by the non-prevailing defendants to analyze the plaintiffs' legal billing entries. In a Tentative Ruling, the court cited Brand Cooper's Expert Report & Opinion several times. The court agreed with Cooper's expert analysis and significantly reduced fees and expenses in several areas. Here are just a few:

"Cooper calculated that 2,798.7 hrs of the total 4,937.6 hours in the case were "block billing". That is nearly 57% of the time entries. The court will apply an across-the-board 15% reduction in requested fees (after other deductions) based on this impediment to the reasonableness review."

"Cooper has analyzed these entries [vague and ambiguous entries] and determined they consist of 624.10 hours or $158,872 in fees. The court will reduce the requested fees by this amount."

"Cooper identified 121.45 time and $21,485 in fees devoted to deposition scheduling. This task does not require professional services. Again, plaintiff do not respond to this assertion the court will reduce fees in this amount."

In the Final Ruling, the court award plaintiffs $600,000 in fees and $25,000 in costs, which represents a major reduction from the original $2.5 million fee application.