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Category: Fee Expert / Member

Georgia Judge Asked to Reconsider Sanctions in Billing Practices

October 18, 2022

A recent Law 360 story by Kelcey Caulder, “Ga. Judge Asked To Reconsider Sanctions in Billing Row” reports that a Georgia state judge is considering what evidence should be allowed to go before the jury and whether to impose sanctions on Gebo Law LLC in a case in which the firm alleges one of itsrbusiness clients owes it about $600,000 in unpaid legal fees.

The firm's Carl Gebo, through his Atlanta-area practice, sued Cordial Endeavor Concessions of Atlanta LLC, which operates a travel spa in Hartsfield-Jackson Atlanta International Airport, last September seeking reasonable compensation for almost 2,000 hours of time he said he spent representing the Georgia company in various matters between April 2015 and May 2020.  Gebo, whose work for Cordial included litigation in New York, claimed his services were worth about $600,000.

But in a hearing before Judge William "Bill" G. Hamrick III, Carl E. Anderson of the Law Office of Carl E. Anderson, who represents Cordial, argued that there is no way to know whether Gebo's services were worth that much because the attorney threw away contemporaneous "scrap notes" and time records that detailed his work for the company and instead submitted one invoice to Cordial in June 2020 that purportedly outlined all work and charges owed.

Anderson argued that Gebo should be sanctioned for spoliation of evidence for getting rid of the notes, saying the attorney had reason to believe litigation would arise from the fee dispute and therefore had a duty to keep them.  This, he claimed, is supported by an "extensive" phone call Gebo had with Cordial's managing member Sheila Edwards before submitting the invoice, in which Anderson said Gebo threatened to sue Cordial for his legal fees and informed Edwards that he wouldn't perform any more work for the company until he received a "satisfactory" payment plan for them.

Gebo should've kept the notes as evidence following that conversation, Anderson said, arguing that Cordial is "clearly prejudiced" without them as it can neither use them to verify the invoice nor adequately cross-examine Gebo regarding its accuracy.  "No attorney can accurately record time months after the fact, much less after five years, without contemporaneous time entries," Anderson said.  "Unless based upon contemporaneous time records, the narratives in the invoices are unreliable at best."

Tyler Dillard of Andersen Tate & Carr PC, who represents Gebo, argued that the attorney hadn't foreseen the possibility of litigation prior to deleting the contemporaneous notes as he assumed that Cordial would pay the firm for its work.  There is no evidence suggesting otherwise, Dillard said, beyond what he called Cordial's "completely self-serving claim" that Gebo threatened litigation.  According to Dillard, Gebo's decision to get rid of the notes was nothing more than a matter of routine.

"What they're claiming is that Mr. Gebo needed to save his post-it notes or scrap legal pads for five years, where he may have written down a half hour call with someone or something like that," Dillard said.  "No lawyer I know keeps their post-it notes or scrap legal pad after putting it into an invoice.  No lawyer I know sends those things out with invoices to reiterate what is on the invoices.  It doesn't make any sense."

Dillard also noted that former Georgia State-wide Business Court Judge Walter W. Davis declined to sanction Gebo for this same issue in May.  While the judge at that time said he would've kept the notes if it were him, he'd also called the invoices "particularly detailed" and found that Gebo hadn't acted in bad faith, Dillard said.  All things considered, Dillard argued that the court should consider awarding Gebo fees for having to respond to another sanctions motion related to the same topic.

Donna L. Johnson of Donna L. Johnson PC, who also represents Gebo, further argued that the court should grant Gebo's limine motion asking that Cordial be prohibited from introducing argument or testimony related to the alleged spoliation of the scrap notes.  The court should do so, Johnson said, because of the previously denied motion for spoliation sanctions and because no new evidence has been presented showing that Gebo had any duty to preserve the notes.

Also before Judge Hamrick on Wednesday was Gebo's motion seeking to exclude the testimony of Matthew Martin, a rebuttal expert brought in by Cordial to testify about the factors that would go into determining an attorney's hourly rate and to help the jury determine what a reasonable fee would be for Gebo's work.  Martin's testimony is necessary, Anderson contended, because Gebo is requesting payment for a $600 hourly rate when his hourly rate had originally been $300 before being increased to more than $400 without Edwards' knowledge or approval in 2017.

According to Anderson, Martin is more than qualified to speak about Gebo's billing practices because he has four decades of experience in commercial litigation and has served as an administrative partner of Jones Day's Atlanta office and was vice chair and client finance partner of Paul Hastings' Atlanta office, among other management roles.

But Dillard argued that Martin's testimony must be excluded because he doesn't offer an opinion of what he believes to be the reasonable value of Gebo's services to Cordial, which is the sole remaining issue to be determined by the jury.  And even if he did offer such an opinion, Dillard contended, he doesn't have the necessary knowledge and experience as a government procurement and contracting attorney to assist the jury in actually determining the value of those services.

Dillard further contended that Martin's testimony must be excluded because he didn't take into consideration the rates of other attorneys that typically do work similar to the work Gebo performed or look into surveys of attorneys' hourly rates.  "Any expert in this case who is going to offer an opinion has to be able to help the jury decide on the single issue of quantum meruit damages for Gebo's legal services in whatever amount," Dillard said.  "If the expert can't provide them with their expertise in answering that question, then they aren't offering anything that's relevant."

Judge Hamrick asked Anderson to clarify what, exactly, Martin's testimony focused on, to which the attorney responded that it would be about the "appropriate way" of reaching an opinion on the reasonableness of fees.  "He is assisting the jury in understanding how you establish a reasonable rate for services under the facts of this case," Anderson said.  Dillard responded, saying that Cordial could question Gebo's own expert about the methodology he used to find a reasonable rate during cross-examination.

Six additional limine motions were presented during the hearing, including one in which Gebo argued that any argument or evidence concerning Cordial's finances and ability to pay a large award to Gebo should be excluded.  Johnson said that, in Georgia, a party's financial status isn't relevant or admissible in determining whether they can or should pay a judgment.

"What we're concerned about is clearly an improper argument," Dillard said.  "Which would be them telling the jury that even if they agree with us about the fair value of the services, Cordial isn't able to pay that and would be bankrupt if they had to.  That, clearly, based on Georgia case law, is improper.  You can't appeal to the jury's sympathy by saying they can't afford it and so an award shouldn't be entered."

The Nation’s Top Attorney Fee Experts of 2022

August 15, 2022

NALFA, a non-profit group, is building a worldwide network of attorney fee expertise. Our network includes members, faculty, and fellows with expertise on reasonable attorney fees. We help organize and recognize qualified attorney fee experts from across the U.S. and around the globe. Our attorney fee experts also include court adjuncts such as bankruptcy fee examiners, special fee masters, and fee dispute neutrals.

Every year, we announce the nation's top attorney fee experts. Attorney fee experts are retained by fee-seeking or fee-challenging parties in litigation to independently prove outside attorney fees and expenses in court or arbitration. The following NALFA profile quotes are based on bio, CV, case summaries and case materials submitted to and verified by us. Here are the nation's top attorney fee experts of 2022:

"The Nation's Top Attorney Fee Expert"
John D. O'Connor
O'Connor & Associates
San Francisco, CA

"Over 30 Years of Legal Fee Audit Expertise"
Andre E. Jardini
KPC Legal Audit Services, Inc.
Glendale, CA

"Widely Respected as an Attorney Fee Expert"
Elise S. Frejka
Frejka PLLC
New York, NY

"Experienced on Analyzing Fees, Billing Entries for Fee Awards "
Robert L. Kaufman
Woodruff Spradlin & Smart
Costa Mesa, CA

"Highly Skilled on a Range of Fee and Billing Issues"
Daniel M. White
White Amundson APC
San Diego, CA

"Excellent at Communicating Her Fee Analysis to Juries, Triers of Facts, and Clients"
Jacqueline S. Vinaccia
Vanst Law LLP
San Diego, CA

"Real World Billing Review Combined With Over 40 Years of Trial Experience"
Fred M. Blum
Edlin Gallagher Huie + Blum
San Francisco, CA

"Total Mastery in Resolving Complex Attorney Fee Disputes"
Peter K. Rosen
JAMS
Los Angeles, CA

"Understands Fees, Funding, and Billing Issues in Cross Border Matters"
Glenn Newberry
Eversheds Sutherland
London, UK

"Nation's Top Scholar on Attorney Fees in Class Actions"
Brian T. Fitzpatrick
Vanderbilt Law School
Nashville, TN

NALFA Releases 2021 Litigation Hourly Rate Survey & Report

July 19, 2022

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.   Today, NALFA released the results from its 2021 hourly rate survey.  The survey results, published in The 2021 Litigation Hourly Rate Survey & Report, shows billing rate data on the very factors that correlate directly to hourly rates in litigation:

City / Geography
Years of Litigation Experience / Seniority
Position / Title
Practice Area / Complexity of Case
Law Firm / Law Office Size

This empirical survey and report provides micro and macro data of current hourly rate ranges for both defense and plaintiffs’ litigators, at various experience levels, from large law firms to solo shops, in regular and complex litigation, and in the nation’s largest markets.  This data-intensive survey contains hundreds of data sets and thousands of data points covering all relevant billing rate categories and variables.  This is the nation’s largest and most comprehensive survey or study on hourly billing rates in litigation.

This is the second year NALFA has conducted this survey on billing rates.  The 2021 Litigation Hourly Rate Survey & Report contains new cities, additional categories, and more accurate variables.  These updated features allow us to capture new and more precise billing rate data.  Through our propriety email database, NALFA surveyed thousands of litigators from across the U.S.  Over 8,400 qualified litigators fully participated in this hourly rate survey.  This data-rich survey was designed to aid litigators in proving their lodestar rates in court and comparing their rates to their litigation peers.

The 2021 Litigation Hourly Rate Survey & Report is now available for purchase.  For more on this survey, email NALFA Executive Director Terry Jesse at terry@thenalfa.org or call us at (312) 907-7275.

NALFA Members Quoted in Bloomberg Story on Billing Rates

June 10, 2022

A recent Bloomberg Law story by Roy Strom, “Big Law Rates Topping $2,000 Leave Value ‘In Eye of Beholder’” quoted two NALFA members, John D. O'Connor of O'Connor & Associates in San Francisco and Jacqueline S. Vinaccia of Vanst Law LLP in San Diego, on a news story on hourly billing rates.  His story reads:

Some of the nation’s top law firms are charging more than $2,000 an hour, setting a new pinnacle after a two-year burst in demand.  Partners at Hogan Lovells and Latham & Watkins have crossed the threshold, according to court documents in bankruptcy cases filed within the past year.  Other firms came close to the mark, billing more than $1,900, according to the documents.  They include Kirkland & Ellis, Simpson Thacher & Bartlett, Boies Schiller Flexner, and Sidley Austin.

Simpson Thacher & Bartlett litigator Bryce Friedman, who helps big-name clients out of jams, especially when they’re accused of fraud, charges $1,965 every 60 minutes, according to a court document.  In need of a former acting US Solicitor General? Hogan Lovells partner Neal Katyal bills time at $2,465 an hour.  Want to hire famous litigator David Boies?  That’ll cost $1,950 an hour (at least).  Reuters was first to report their fees.

Eye-watering rates are nothing new for Big Law firms, which typically ask clients to pay higher prices at least once a year, regardless of broader market conditions.  “Value is in the eye of the beholder,” said John O’Connor, a San Francisco-based expert on legal fees.  “The perceived value of a good lawyer can reach into the multi-billions of dollars.”  Law firms have been more successful raising rates than most other businesses over the past 15 years.

Law firm rates rose by roughly 40 percent from 2007 to 2020, or just short of 3 percent per year, Thomson Reuters Peer Monitor data show.  US inflation rose by about 28% during that time.  The 100 largest law firms in the past two years achieved their largest rate increases in more than a decade, Peer Monitor says.  The rates surged more than 6% in 2020 and grew another 5.6% through November of last year.  Neither level had been breached since 2008.

The price hikes occurred during a once-in-a-decade surge in demand for law services, which propelled profits at firms to new levels.  Fourteen law firms reported average profits per equity partner in 2021 over $5 million, according to data from The American Lawyer.  That was up from six the previous year.

The highest-performing firms, where lawyers charge the highest prices, have outperformed their smaller peers.  Firms with leading practices in markets such as mergers and acquisitions, capital markets, and real estate were forced to turn away work at some points during the pandemic-fueled surge.  Firms receive relatively tepid pushback from their giant corporate clients, especially when advising on bet-the-company litigation or billion-dollar deals.

The portion of bills law firms collected—a sign of how willingly clients pay full-freight—rose during the previous two years after drifting lower following the Great Financial Crisis.  Collection rates last year breached 90% for the first time since 2009, Peer Monitor data show.  Professional rules prohibit lawyers from charging “unconscionable” or “unreasonable” rates. 

But that doesn’t preclude clients from paying any price they perceive as valuable, said Jacqueline Vinaccia, a San Diego-based lawyer who testifies on lawyer fee disputes.  Lawyers’ fees are usually only contested when they will be paid by a third party.

That happened recently with Hogan Lovells’ Katyal, whose nearly $2,500 an hour fee was contested in May by a US trustee overseeing a bankruptcy case involving a Johnson & Johnson unit facing claims its talc-based powders caused cancer.  The trustee, who protects the financial interests of bankruptcy estates, argued Katyal’s fee was more than $1,000 an hour higher than rates charged by lawyers in the same case at Jones Day and Skadden Arps Slate Meagher & Flom.  A hearing on the trustee’s objection is scheduled for next week.  Hogan Lovells did not respond to a request for comment on the objection.

Vinaccia said the firm’s options will be to reduce its fee, withdraw from the case, or argue the levy is reasonable, most likely based on Katyal’s extensive experience arguing appeals.  Still, the hourly rate shows just how valuable the most prestigious lawyers’ time can be—even compared to their highly compensated competitors.  “If the argument is that Jones Day and Skadden Arps are less expensive, then you’re already talking about the cream of the crop, the top-of-the-barrel law firms,” Vinaccia said.  “I can’t imagine a case in which I might argue those two firms are more reasonable than the rates I’m dealing with.”

Article: Do We Really Need An Attorney Fee Expert?

April 18, 2022

A recent article by William F. Cobb, “Do We Really Need An Attorney Fee Expert?” discusses the need to hire an attorney fee expert.  This article was posted with permission.  The article reads:

In 2002, the Fourth District Court of Appeal issued a decision in Island Hoppers Ltd. v. Keith 820 So. 2d 967 (Fla. 4th DCA 2002) discussing whether or not expert testimony should be required to support an award of attorney’s fees to a prevailing party.  The decision questioned the necessity and wisdom of the longstanding judicially-created requirement.

Justice Polen, who authored the opinion in Island Hoppers, recognized that an award of attorneys’ fees must be supported by competent substantial evidence and Florida courts have required testimony by the attorney performing the services, together with testimony by an expert fees witness as to the time and value of those services.  The expert in that case spent a scant three hours in preparation of his opinion in this wrongful death case and is accused of lacking a sufficient factual predicate to form an opinion.  Although Justice Polen and the court allowed the testimony, claiming the testimony went to the weight of the evidence and not its admissibility, the opinion questions whether the longstanding rule requiring the corroborative testimony of an expert fees witness is always the best or most judicious practice. 

The opinion recognizes that expert witnesses are presented to assist with guidance to the trier of fact and fails to see what “guidance” if any a fees expert provides to judges who see various levels of skill and experience in the courtroom on a regular basis.  The opinion does recognize the expert may provide some assistance to the court in terms of a multiplier determination in the market, but distinguished the more fundamental issues of determining appropriate hours expended and rates charged and states the trial judge has greater insight and understanding regarding what is reasonable.   The Island Hoppers decision prompted a Florida Bar Journal article, authored by Robert J. Hauser, Raymond E. Kramer III and Patricia A. Leonard, of Beasley & Hauser, P.A., in January 2003 regarding the same topic, (Vol. 77, No. 1, page 38) essentially agreeing the requirement should be revisited and perhaps eliminated.  In virtually every case decided by the Florida Supreme Court, both before and subsequent to the Island Hoppers decision, the Court has found, or at least commented upon, the requirement for an expert to testify regarding the reasonableness of the time and amount of attorney’s fees being sought, together with a multiplier determination in the relevant market area, especially where there was a fee-shifting provision involved. 

In Roshkind v. Machiela, decided in 2010, the Fourth District Court of appeal again addressed the long-standing requirement of independent expert witness testimony to support a claim for attorney’s fees.  The Court recognized generally “where a party seeks to have the opposing party in a lawsuit pay for attorney’s fees incurred . . . independent expert testimony is required” and “case law throughout this state has adhered to the requirement of an independent expert witness to establish the reasonableness of fees, regardless of whether a first or third party is responsible for payment.”  Although the opinion recognizes Island Hoppers and the previously questioned judicially-created requirement of independent expert testimony to establish the reasonableness of attorney’s fees, it ruled the judicially-created requirement “remains etched in our case law.”  The Fourth District certified a question to the Florida Supreme Court regarding whether or not an expert witness is required to testify to establish attorney’s fees, seeking a final determination of the issue.  The Florida Supreme Court initially accepted jurisdiction but later issued an opinion “upon further consideration, we have determined to deny review and discharge jurisdiction” thereby denying a review and ruling on the issue.

In 2007, In re Amendments to Florida Rules of Civil Procedure, The Florida Bar Civil Procedure Rules Committee recommended adding Rule 1.526 to The Florida Rules of Civil Procedure.  The proposed rule was entitled “Expert Opinion Testimony on Costs and Attorneys’ Fees” and included “[e]xpert opinion is not required to support or oppose a claim or an award of costs, attorneys’ fees, or both, unless by prior order of the court.”  Essentially, the proposed rule would leave it to the trial judge to determine whether or not he or she would require “guidance” in the form of an expert’s opinion regarding the determination of attorneys’ fees.  In rejecting the proposed rule, the Florida Supreme Court opined “that the issue of whether expert opinion testimony is required in this context is not one that is appropriately addressed in a rule of procedure” and declined to adopt the proposed rule.

From a review of the foregoing, although at least one District Court of Appeal has questioned the judicially-created requirement for and independent attorneys’ fee expert to testify in a fee determination hearing, it is clear the Florida Supreme Court consistently has supported and recognized the longstanding requirement and has further refused to adopt a rule of procedure that would allow the trial court to determine the need for expert testimony.  In order to support an award of attorney’s fees, the attorney for the party seeking the fees, whether first or third party obligation for payment is present, is required to retain the services of an expert to offer testimony regarding the reasonableness of the hours expended and amount being sought in recovery in order to prevail.

William F. Cobb is a Partner at Cobb Gonzalez in Jacksonville, FL.

Article: What is a Legal Fee Audit?

October 7, 2021

A recent article by Jacqueline Vinaccia of Vanst Law LLP in San Diego “What is a Legal Fee Audit?,” reports on legal fee audits.  This article was posted with permission.  The article...

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