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Law Firms React to Delayed Attorney Fees in Foster Care Case

February 4, 2011 | Posted in : Expenses / Costs, Fee Award, Fee Award Factors, Fee Request, Hourly Rates, Lodestar

In a recent law.com story, “Foster Care Case Tests Court’s Attorney Fee Bonus Ruling” reports that some law firms have reacted to the delay in an attorney fee award in the Georgia foster care class action case.  NALFA first reported on this case in “U.S. Supreme Court’s New ‘Extraordinary Circumstances’ Fee Enhancement Standard Put to the Test”Comments include:

King & Spalding’s John A. Chandler wrote that most lawyers who would be qualified to handle a case like the foster care challenge “have made a business decision to practice almost exclusively on the defense side, where the law firm is typically compensated on current hourly rates that assume payment of accrued fees and reimbursement of expenses within 30-90 days.”  Such speedy payment, he added, “minimize the demands on a law firm’s working capital, overhead, and the costs associated with extended delays in payment of fees or reimbursement of expenses.”

Henry D. Fellow Jr. of the litigation boutique Fellows LaBriola said if a client approached his firm “requesting that we take on a complex civil rights matter against the State of Georgia requiring the firm to advance tens of thousands of hours of legal services and over $1.6 million in litigation expenses over the course of an unknown period of time, it would be difficult, if not impossible, for my law firm to take such a matter alone in light of the enormous demands such a matter would impose on my firm’s human resources, overhead, and working capital.”

Ralph I. Knowles Jr. of Doffermyre, Shields, Canfield & Knowles suggested that a 200 percent increase over hourly rates would be required to persuade him to take such a case, “in light of the opportunity costs and overhead costs associated with accepting the representation in lieu of devoting my law firm’s resources to more remunerative matters.”

James C. Rawls of McKenna Long & Aldridge, suggested, at a minimum, a 20 percent premium over the lodestar would be needed in a case where, as in this case, “The district court found that the defendants’ ‘strategy of resistance’ undoubtedly prolonged this litigation and substantially increased the amount of fees and expenses that plaintiffs were required to incur.”