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Category: Hourly Rates / Hourly Billing

NALFA: The Four Hourly Rate Factors

December 6, 2017

Hourly rates are the engine that drives attorney fees.  Hour rates are the most important single factor in determining attorney fee awards.  There are several factors that determine hourly rates.  NALFA has identified four hourly rate factors that have significant impact on prevailing market hourly rates.  At NALFA, these four factors are known as the primary variables and should be a part of any hourly rate survey.  We've ranked these hourly rates factors in order of importance:

Geography / Jurisdiction:  This is the most important of the factor in determining hourly rates.  Where an attorney practices matters the most.  Simply put, all things being equal, hourly rates in Manhattan are not the same as hourly rates in Oklahoma City.

Years in Practice / Position Title:  This is the second most important factor in determining hourly rates.  The more senior or experienced the attorney, the higher the hourly rate.  Simply put, all things being equal, hourly rates for partners are not the same as hourly rates for associates.

Practice Area / Complexity of Matter: 
Often overlooked and subtle, the nature of the underlying matters in determining hourly rates.  Hourly rates for more routine matters will not be the same as more complex areas of law.  Simply put, all things being equal, attorneys who practice in insurance defense or workers comp will charge different rates than attorneys who practice in antitrust litigation or white collar crimes.

Law Firm Size:  This is the least important of the factors, but still somewhat relevant.  Simply put, all things being equal, solo practitioners may have different rates than attorneys at very large law firms.

Greenberg Traurig Wins $2M Fee Award in U.S. Court of Claims

November 20, 2017

A recent Law.com story by C. Ryan Barber, “Greenberg Traurig Wins $2M Fee Award in Suit Against U.S. Government,” reports that a federal claims court judge ordered the government to pay $2 million in legal fees to Greenberg Traurig for its work representing a Florida real estate developer that prevailed in a long-running case over the denial of a permit to fill in wetlands.  After two rounds through U.S. Court of Federal Claims, each followed by an appeal to the U.S. Court of Appeals for the Federal Circuit, the company, Lost Tree Village Corp., prevailed in its challenge when the U.S. Supreme Court declined in June to hear the case.

The U.S. Department of Justice had asked the high court to review a 2015 decision that said the U.S. government’s denial of the fill permit amounted to an uncompensated “taking” of Lost Tree’s property.  Charles Lettow, a judge on the U.S. Court of Federal Claims, ordered the government to pay $4.2 million in damages, plus $3.5 million in interest.  Lost Tree Village Corp.’s lawyers at Greenberg Traurig, led by Washington partner Jerry Stouck, had argued the government owed more.

Stouck this summer went to the Federal Claims court seeking about $2 million in attorney fees from the government, along with $100,000 in other fees and expenses incurred by Lost Tree.  Stouck, chairman of the firm’s regulatory and administrative law practice, identified Lost Tree’s legal fees in remarkable detail, noting a period in which he and two other principal timekeepers at Greenberg Traurig had given discounts of between 5 and 15 percent of the standard hourly rates.  Stouck identified his standard billing rate, for 2017, at $810 an hour.  Greenberg Traurig’s court filings reveal standard billing rates for Stouck and other Greenberg lawyers from 2007 to now.

For the first appeal to the Federal Circuit, Stouck said, the firm and Lost Tree agreed on a fixed fee of $67,00, plus expenses, with an additional $300,000 payable only if Greenberg Traurig prevailed. (It did so.)

The $300,000 success fee, under the terms of the agreement, would be “recoverable from the government as part of the reasonable attorneys’ fees due to Lost Tree.”  Stouck told the court that Lost Tree “has achieved complete success.”  He added: “Perhaps more importantly, while this case was hard-fought and long-fought, Lost Tree has prevailed completely on what both parties and the court recognized from the outset was the principle issue to be decided—the ‘relevant parcel’ issue.”

The Justice Department, arguing that Greenberg Traurig’s billing “reflects excessive rates for attorney and paralegal work,” said Lost Tree should be awarded at most $1,078,121 in fees.  In a court filing, the Justice Department said Greenberg Traurig billed for “work done on matters unrelated to this case and irrelevant to the merits, work where the hours devoted to tasks were far beyond reasonable or duplicated by multiple attorneys, and work where very senior personnel were performing tasks typically done by more-junior personnel.”

From the government’s filing: “Most egregiously, plaintiff seeks reimbursement for a $300,000 bonus not-yet paid that is not based on work done for the case, but instead because they were victorious on appeal.  The United States has not waived its sovereign immunity to reimburse ‘success fees’ sought in addition to fees for the hours actually devoted to work on the case.

“I was actually surprised that the government had disputed our fees so aggressively because, as you can see from the opinion, my client has paid all of the fees,” Stouck said.  “And I think that is a very substantial proof of the reasonableness of it.”

In a court filing, Stouck defended the $300,000 success fee as not just reasonable but a “greatly reduced” fee for the appeal.  “This is not a situation where Greenberg is seeking an ‘enhancement’ to its hourly rates,” he wrote in a court filing.  “Lost Tree and Greenberg are simply asking the court to enforce their reasonable, arm’s length agreement.  In the context of this case, the alternative fee arrangement represents Greenberg’s commercially-available rate.”  The judge did not award the success fee but did award $91,000 in fees that were incurred beyond the fixed expense of $67,500.

Jones Day Seeks Fees from EEOC After “Baseless Suit”

November 13, 2017

A recent NLJ story by Erin Mulvaney, “Jones Day Seeks $446K in Fees From EEOC After ‘Baseless Suit’ Goes Nowhere” reports that Jones Day lawyers are seeking hundreds of thousands in legal fees from the U.S. Equal Employment Opportunity Commission, saying federal regulators unfairly targeted CVS Pharmacy Inc. for alleged employment abuses that no judge sustained.  Eric Dreiband, the lead partner for CVS in the litigation, is the Trump administration's pick to lead the U.S. Justice Department's Civil Rights Division.

The EEOC sued CVS in 2014 over a severance agreement the agency said limited the rights of employees to file complaints.  The EEOC called the severance agreement “overly broad” and argued it was part of a CVS “pattern or practice of resistance” to restrict the civil rights of the company’s employees.  The agency lost its case, EEOC v. CVS Pharmacy, in the U.S. District Court for the Northern District of Illinois and in its appeal in the U.S. Court of Appeals for the Seventh Circuit.  The appeals court concluded the agency too broadly interpreted its enforcement powers.

The dispute is back in the Seventh Circuit as Jones Day--led by partner Eric Dreiband—seeks attorney fees for the work the firm did for CVS.  The district court said CVS was entitled to legal fees.  Dreiband and the Jones Day team want $446,339 for 250 hours of work.

The dispute provides a glimpse at the billing practices at Jones Day.  In court filings, Dreiband requested legal fees for himself and Jones Day associates.  Dreiband identified his hourly rate at $560.  Ninth-year associate Jacob Roth, a former clerk to the late Justice Antonin Scalia, billed at $475 per hour; Nikki McArthur at $275 per hour; and staff attorney Adria Villar at $175 per hour.

“These rates are significantly less than what Jones Day actually billed, and was paid, for the firm’s work on this matter,” Dreiband said in a declaration.  “These rates are also lower than what Jones Day typically bills for these timekeepers on other similar matters.”

Dreiband argued in the request for legal fees that the EEOC “concocted what it admits to be a novel interpretation of Title VII that would give the agency vast power” to challenge employment practices that it doesn’t like.  He argued the EEOC exceeded its authority in filing the suit—refusing any conciliation with CVS—and issuing a press release announcing the case.

“The EEOC instead rushed to file a baseless lawsuit, and blasted CVS with an inflammatory press release falsely accusing the company of interfering with Title VII rights,” Dreiband told the appeals court.  EEOC lawyers, responding to the claims, said the agency had reason to believe it would prevail and that the fees awarded were an abuse of direction.

“Although the EEOC did not prevail, this theory—which was consistent with the statutory language and this court’s precedents—was entirely plausible, and the EEOC had no reason to believe with any certainty that it would not succeed,” EEOC lawyers told the Seventh Circuit.

John Darrah, the federal trial judge who said Jones Day was entitled to fees, concluded the EEOC had violated its own internal regulations in the case against CVS.  “The EEOC’s own regulations require the agency to use informal methods of eliminating an unlawful employment practice where it has reasonable cause to believe that such a practice has occurred or is occurring,” Darrah wrote in his ruling.

No Fee Enhancement in Prolonged Med Mal Case

November 10, 2017

A recent New York Law Journal story by Jason Grant, “Morelli Denied Enhanced Fee in Seven-Year Long Med Mal Case” reports that the Manhattan-based firm, led by famed civil litigator Benedict Morelli, was sufficiently compensated when it was paid $376,198.50 for 970 hours of legal services, in accordance with Judiciary Law § 474-a(2), which sets out a schedule for contingency fees earned by lawyers in medical, dental or podiatric malpractice actions.

The Morelli Law Firm is not due an increased contingency fee award based on alleged “extraordinary circumstances” in representing a client in a medical malpractice lawsuit for 7½ years, a state appeals court has ruled.  A unanimous Appellate Division, Second Department, panel ruled that, while the statute provides for higher fees based on extraordinary circumstances, Morelli had not made a “threshold showing” that the money collected by his firm was inadequate.

“The law firm expended approximately 970 hours, that included 9 days of trial, over the course of the 7½ years it represented the plaintiffs in this medical malpractice action,” wrote Justices John Leventhal, Betsy Barros, Valerie Brathwaite Nelson and Linda Christopher.  “The record is devoid of any evidence that the amount of time spent on the representation of the plaintiffs resulted in an exceptionally low hourly rate of compensation, or that it caused the law firm any financial detriment.”

“Inasmuch as the law firm failed to make the threshold showing that compensation in this case was inadequate, it is not necessary to reach the issue of whether extraordinary circumstances existed,” the panel added in a terse opinion issued Nov. 1, in Siu Kiu Lam v. Nelly Loo, et al.; Morelli Law Firm, PLLC, nonparty-appellant, 20028/09.  The panel’s opinion affirmed the June 2016 decision of Kings County Supreme Court Justice Bert Bunyan, who had denied the Morelli firm’s motion under Judiciary Law § 474-a for an increased contingency fee award.

Ninth Circuit Remands BAR/BRI Fee Award for Second Time

November 1, 2017

A recent MetNews story, “Ninth Circuit Vetoes Attorney Fee Award for Second Time” reports that the Ninth U.S. Court of Appeals has, for a second time, remanded a case to the District Court for the Central District of California for a determination as to how much of a $9.5 million settlement fund in a class action against West Publishing Corporation will go to the plaintiffs’ attorneys.

The lawsuit alleged that BAR/BRI, a bar exam preparatory course then owned by West, conspired with Kaplan, Inc. to limit competition in the field. U.S. District Court Judge R. Gary Klausner awarded class counsel attorney fees in the amount of $883,475.50 and $20,734.89 in costs.

Six class members had protested the $1.9 million in fees and $49,934.89 in cost being sought.  Klausner granted the objectors attorney fees in the amount of $7,354.90 based on their success in getting the award pared, and provided for incentive awards of $500 to each of the objectors.  Class members were those who purchased the BAR/BRI course at any time from Aug. 1, 2006 to March 21, 2011.

A three-judge panel, composed of Judges Stephen Reinhardt, Richard Paez and Milan Smith, found in their memorandum opinion that Judge R. Gary Klausner correctly used the lodestar method of calculating the award—multiplying the number of hours reasonably expended by the prevailing rate for attorney fees—as Judge Manuel L. Real had last year when he presided over the case.  An alternative method would have been a percentage of the settlement.

However, the judges said that Klausner, to whom the case was assigned following a reversal of Real’s award, failed “to update the lodestar calculation to compensate for the delayed payment.”  He used the 2016 calculations, without either taking into account the increase between then and now in the prevailing rates or applying a “prime-rate enhancement,” the opinion says.  The judges also faulted him for not using a multiplier based on the risk factor in undertaking a case without certainty of an award.

However, the judges said Klausner was correct in finding the case was not a rare one in which the fee needed to be adjusted up or down to meet the test of reasonableness, and that he was justified in excluding expert fees that were not properly documented.

NALFA Analysis: Partner Bankruptcy Rates

October 27, 2017

NALFA conducted a survey of partner hourly rates in bankruptcy cases.  NALFA examined dozens of court filings in bankruptcy cases over the past couple years.  The following results of our survey are...

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