Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Category: Hourly Rates

Litigation Billing Rate Data Has Chi-Squared Distribution

January 25, 2023

NALFA recently released the results from its 2022 Litigation Hourly Rate Survey.  The results, published in The 2022 Litigation Hourly Rate Survey & Report, contains billing rate data on the factors that correlate directly to hourly rates in litigation: geography, years of litigation experience, position or title, complexity of case, and litigation practice 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 third year NALFA has conducted this survey on billing rates. The 2022 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 16,600 qualified litigators fully participated in this hourly rate survey.

For the third year in a row, at the macro level, we find a chi-squared distribution for litigation billing rates.  When we plot all responses (plaintiffs' and defense) in both regular and complex litigation on a graph (x,y axis), we have a general shape distribution model known as chi-squared distribution.  That is, the distribution is not the classic bell-shaped curve. Our model here starts from a low point ($200-$250), climbs to the highest point ($451-$500), before the midpoint ($601-$650), then declines gradually and finishes with a long tail with an uptick at the very end (Over $1100). 

"You can see that the climb upwards is steeper than the gradual decline downwards," said Terry Jesse, Executive Director of NALFA .  In the graph below, the y axis is the percentage of responses and the x axis is our 20-point hourly rate scale (Less than $200 to Over $1100).

 

NALFA Releases 2022 Litigation Hourly Rate Survey & Report

December 20, 2022

Every year, NALFA conducts an hourly rate survey of civil litigation in the U.S.   Today, NALFA released the results from its 2022 hourly rate survey.  The survey results, published in The 2022 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 third year NALFA has conducted this survey on billing rates.  The 2022 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 16,600 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 2022 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.

Judge Needs More Data in $2.8M Attorney Fee Request

November 10, 2022

A recent Law 360 story by Leslie Pappas, “Chancery Oks Aerospace Co.’s Pay Suit Deal, Defers Fees” reports that a Delaware Chancery Court judge approved a settlement between aerospace parts manufacturer TransDigm Group Inc. and a stockholder who sued over excessive director pay, but postponed a decision on a requested $2.8 million attorney fee award, saying she lacked data to evaluate it.

At a bench ruling at the end of a virtual hearing, Vice Chancellor Lori W. Will told attorneys for plaintiff Matthew Sciabacucchi, represented by Farnan LLP and Levi & Korsinsky LLP, that she intended to award a fee but couldn't do it without more information.  "I don't have the full picture," she said. "I'm going to give counsel a better shot of submitting the information I'm asking for."  The attorneys had sought $2.8 million in fees and a $4,000 incentive award for the deal, which they estimated would save TransDigm $23.8 million in cash over the next four years.

Sciabacucchi sued in November 2021, claiming the company's top officers and directors were awarding themselves compensation that was 176% higher than their peers.  TransDigm's executive chairman W. Nicholas Howley and its president and CEO Kevin Stein, for example, received a "staggering" $68.1 million and $22 million respectively for the company's fiscal year ending September 2020, according to the complaint.

Vice Chancellor Will said she didn't know the net present value of the estimated $23.8 million savings, nor did she have enough information to assess the effects of reducing the strike price of the options.  "I do intend to award a fee," she said.  "This is a good settlement, and counsel should be commended for it."

Article: New Ruling Considers Hourly Rates in Chapter 11 Cases

November 8, 2022

A recent Law 360 article by Tyler Brown, Jason Harbour and Justin Paget of Hunton Andrews Kurth LLP, “How Ch. 11 Ruling Ends War Between National, Local Rates” reports on a recent ruling on hourly rates in Chapter 11 cases.  This article was posted with permission.  The article reads:

On Oct. 18, the U.S. Bankruptcy Court for the Eastern District of Virginia approved the professional fee applications in the Nordic Aviation Capital bankruptcy cases, including the rates of each of the professionals as appropriate market rates.  This settles any remaining uncertainty in how professionals' hourly rates will be considered for approval in bankruptcy courts in the district. In particular, the bankruptcy court noted that

[m]uch ink has since been spilled differentiating so-called "local" rates from "national" rates. The distinction is much ado about nothing.  The market for professional services cannot be predetermined by geography alone.

Instead of relying on geography alone, the bankruptcy court stated that

the plain language of the Bankruptcy Code directs the Court to consider the "customary compensation charged by comparably skilled practitioners in cases other than cases under [Title 11]."  The Court must, therefore, look at whether the rates charged are consistent with those set in the relevant market.

To determine the relevant market, the court noted that the market rate will be set for the most part by the amount clients are willing to pay for professional services.  The factors clients may consider in the selection process might include the reputation of the professional, the specialization of the professional, the need for the professional's experience and expertise, the stakes of the transaction and the time pressures of the engagement.

The court also stated that a good understanding of the relevant market in any given case could be gleaned from the rates of professionals other than those engaged by:

    The debtor;

    Debtor-in-possession financing budgets;

    Monthly operating reports of the debtor;

    Information required by the U.S. trustee program guidelines; and

    The checks and balances built into the fabric of the reorganization process to police the market.

The bankruptcy court also reiterated that the applicable factors for approving professional fee applications are those enumerated in Title 11 of the U.S. Code, Section 330(a)(3), and the Johnson factors.

Additionally, the bankruptcy court noted that in applying the Johnson factors, "it must heed the Fourth Circuit's admonition against per se rules beyond those legislatively mandated," noting that the court cannot "abdicate the equitable discretion granted to it by establishing rules of broad application which fail to take into account the facts of a particular case and the overall objectives of the bankruptcy system."[6]

After identifying the applicable legal standard, the bankruptcy court addressed the evidence that was relevant to the approval of the professional fee applications, including the rates of the professionals.  As the fee applications were uncontested, the court stated that it issued the memorandum opinion to provide guidance to practitioners on the facts they need to develop in support of fee applications filed in bankruptcy cases pending before that court.

In taking the unusual step of issuing a lengthy memorandum opinion for uncontested fee applications, the bankruptcy court put to rest what one commentator recently suggested was a war between national and local rates in the Eastern District of Virginia in mega Chapter 11 cases.  The issue arose in connection with the appeal of the plan confirmation order in the Mahwah Bergen Retail Group Inc. cases on unrelated grounds.

After vacating confirmation in that case, the U.S. District Court for the Eastern District of Virginia ordered that the bankruptcy court issue proposed findings of fact and conclusions of law on any further fee applications in the case and questioned whether attorney rates should exceed the prevailing market rates in the Richmond division of the Eastern District of Virginia.

The district court's order created uncertainty as to how the bankruptcy court might subsequently analyze the rates of professionals from outside the Richmond division.  That uncertainty was short-lived.  Importantly, the memorandum opinion represented one of the bankruptcy court's first opportunities to address professional fee applications in a large Chapter 11 case since the entry of the district court order adopting the bankruptcy court's report and recommendation in the Mahwah Bergen bankruptcy cases.

In the memorandum opinion and the bankruptcy court's report and recommendation, two bankruptcy judges from the Eastern District of Virginia have extensively detailed the legal precedent in the U.S. Court of Appeals for the Fourth Circuit and the appropriate factual predicates for approving market rates.

In sum, the memorandum opinion provides comfort to all practitioners, including those from outside the Eastern District of Virginia, that the appropriateness of attorney rates in cases filed in the district will continue to be assessed through application of the factors identified in Section 330(a)(3) and the Johnson factors on a case-by-case basis, without any additional requirements or per se rules.

Chancery Ponders $5.3M Fee Request in $21.6M Class Settlement

November 7, 2022

A recent Law 360 story by Jeff Montgomery, “Chancery Delay $21.6M Class Deal, Fee OK in Presidio Suit” reports that a Delaware vice chancellor put off final approval of a $21.6 million settlement for a class challenge to the sale of tech services provider Presidio Inc., agreeing with the deal but ordering clarifications and saying he wanted to ponder a proposed $5.3 million attorney fee.  Vice Chancellor J. Travis Laster said class attorneys had achieved "a very good result" after more than 2½ years of litigation over the company's $2.1 billion sale to an affiliate of private equity firm BC Partners.

The suit accused Presidio of snubbing a competing offer under pressure from BC Partners and controlling shareholder Apollo Global Management Inc.  The Firefighters' Pension System of the City of Kansas City, Missouri Trust agreed to the settlement after mediation and a recommendation from the mediator.  "I'm going to go ahead and approve the settlement" pending "tweaks" of the agreement, the vice chancellor said.  "I'm going to think more about the attorney fee issue and put a number in when I get the final order."

At issue were sections of the settlement that the vice chancellor viewed as redundant, murky or unnecessary and — in the case of the fee — a question of "how good is good" when considering an award that amounted to about 25% of the total settlement.  The share would stand near the upper end of Chancery Court awards for settlements before trial but after extensive litigation.

J. Daniel Albert of Kessler Topaz Meltzer & Check LLP, counsel to the class, told the vice chancellor that the court has approved a 25% fee for cases "procedurally less developed" than the Presidio action, and said that "for policy reasons, the court should want to incentivize these types of results."  The fee reflected about 9,250 hours of attorney work that involved nearly $233,000 in expenses, with a fee translating into a $578-per-hour rate "well below" that seen in similar litigation, Albert said.

The lawsuit initially named the board members, outside directors and Apollo as defendants, but in January 2021 Vice Chancellor Laster dismissed them from the suit.  "I do understand your argument that when you get up to 100% or more of the [potential] trial result you should get the high end" of fee award ranges, he said, adding that he also understood the potential for expenses lost to "front end" books and records demand litigation in support of the case.

The fee, Albert argued, exceeded what the settlement motion described as the "likely provable damages under plaintiff's primary theory of liability against the defendants: that the auction between BCP and CD&R was tainted by the alleged tip-off of CD&R's offer price to BCP by LionTree."