February 20, 2020
A recent AI article by John D. O’Connor, “The Need For Attorney Fee Expertise (pdf),” reports on the need for attorney fee expertise to prove reasonable attorney fees and proper billing practices in underlying litigation. This article was posted with permission. The article reads:
Most corporate clients today have access to excellent litigation counsel in each particular area of concern. However, as attorney fee disputes are increasingly becoming a by-product of the main litigation event, few clients and few otherwise excellent litigators truly understand when and how to use attorney fee experts.
Although the “American Rule” provides that each litigating party bears its own fees, there are exceptions to this rule. Successful class actions; employment and governmental discrimination cases; eminent domain suits; RICO claims; and other cases result in legally-sanctioned attorney fees claims. Promissory notes, guarantees, real estate purchase agreements, and corporate acquisition contracts often contain attorney fee clauses. High-stakes insurance coverage litigation usually features a battle over fees incurred in the underlying case(s). It is common for a case with a small monetary award to result in an extremely high request for fees.
Typically in fees proceedings, the party with a claim to fees files a motion detailing the amount it requests, accompanied at a minimum by a Declaration of the main litigating attorney attaching a statement of his billings, detailing hours and rates for which payment is sought. The main billing attorney will normally justify the requested billing rate, which can be his actual rate or a rate claimed to be prevailing in the community for one of similar skill and experience. The motion, usually accompanied by a brief summarizing the law of fees in that type of case, includes the statutory or contractual authority for same.
When the responding party files its submission, the contours of the ultimate dispute take shape. It is common for the respondent to challenge the billing rates as unduly high; the number of lawyers assigned as excessive; the hours spent as inefficient; the number and length of conferences and meetings as unnecessary; the billing form as improperly “blocked” and “vague” in description; many of the tasks billed as being unwisely or improvidently chosen; certain work as not related to prevailing claims; and generally excessive fees for the type of litigation involved. Often this opposition is accompanied by a request for limited discovery regarding fees.
As objections are detailed in various cases, the challenging lawyer is usually able to write an impressive brief in support. These objections can be made without an expert witness, except as to prevailing billing rates, which the responding lawyer is qualified to opine. The responding party will have made a serious mistake, however, if it did not bolster its objections with a detailed opinion of an experienced fee expert. Often, the reviewing Court has witnessed the work of the petitioning lawyers and formed a positive opinion of them. Indeed, the reviewing Court in the underlying case would often have ruled in favor of the petitioner and against the respondent. Even if not, the respondent must labor against the human assumption that established, competent lawyers have billed in accordance with community standards.
However, surprisingly, it is common for responding parties to put forth objections without an expert. We have seen cases where fees sought into eight figures, where no expert has been retained, with unenviable results. Most experts have the capability of presenting a computer analysis isolating hours and tasks, which can claim to isolate amounts of “block” entries, incompensable “clerical” time, and other practices. Such a presentation, though, is often superficial, and may not impress a reviewing Court seeking a principled basis upon which to reduce fees for the prevailing party.
Whatever the case, any attack on the requested fees should call for a rebuttal by a qualified attorney fee expert on behalf of the petitioner. However, this guideline is frequently observed in the breach. Even if the Court had been inclined to a favorable opinion of the petitioning firm, even a superficial attack on the petitioning lawyers’ fees can be facially effective, and thus the petitioner would need to blunt effectively any such attack.
A qualified expert can help by suggesting needed discovery from the responding party of information regarding that party’s billings which supports the petitioner’s request. More importantly, an expert employed correctly will go beyond the glittering generalities put forth in these disputes. They would show why a particular billing rate is justified with specific reference to specific firms doing nearly identical work or why a particular task was necessarily and properly time-consuming.
Most reviewing Courts are experienced at resolving factual disputes based on a presentation of specific compelling facts. A wise litigation party, in short, should employ an expert to do just that.
John D. O’Connor is a NALFA member and the Principal of O’Connor & Associates in San Francisco. For more on John D. O’Connor, visit www.joclaw.com.