A recent Law 360 story by Beverly Bank, “’Vague’ Billing Justifies 10% Cut in Atty Fees, Judge Says”, reports that a federal magistrate judge recommended slashing an Iron Workers' benefits funds' request for attorney fees in a case over an employer's unpaid contributions, saying there are "vague" billing entries from the plaintiffs' counsel as part of a $2.2 million judgment.

U.S. Magistrate Judge Kimberly G. Altman issued a report and recommendation, suggesting the district court cut a nearly $111,000 attorney fee request from Iron Workers Local No. 25's benefit funds by 10%.  The attorney fees dispute is connected with U.S. District Judge Nancy G. Edmunds' order, requiring Next Century Rebar LLC to pay more than $2.2 million in unpaid contributions with interest and liquidated damages.  The company filed a notice of appeal to the Sixth Circuit.

"Portions of the trustees' itemized hourly work are described insufficiently to prove that the work 'was performed with reasonable diligence and efficiency,'" Judge Altman said.  The judge said many of the funds' billing entries linked to an audit are "vague," necessitating a drop in proposed attorney fees from around $110,900 to roughly $99,800.  Judge Altman did not disturb the funds' request for more than $18,200 in costs.

The judge pointed to billing entries connected with an audit, saying some entries about the correspondence and emails with the auditor "provide the court with little information as to the necessity of the work."  The benefit funds requested around $110,900 in October, saying the plaintiffs' counsel spent 388.8 attorney hours in pursuing the case.

Next Century Rebar called billing entries linked to the attorney fees request "excessive, duplicative, and vague" as part of the company's Oct. 30 response. The company challenged the funds' bid for fees over review of the audit.  "Excessive review of the audit is ongoing throughout the time entries of multiple persons without any detail or reason for the excessive amount of time spent reviewing, re-reviewing, and again revisiting the audit report," Next Century Rebar said.

The company said the funds were seeking fees for clerical work that could have been undertaken by a legal clerk or assistant to the plaintiffs' attorneys.  Judge Altman found that some of Next Century Rebar's complaints about the clerical work entries were valid and warranted lower attorney fees.  "Next Century has highlighted instances where parts or all of the described work was clerical in nature and could have been handled by paralegals or other staff at much lower rates," the judge said.

The judge took on arguments from Next Century that the request related to audit costs of about $13,000 was "outrageous," saying the company didn't raise evidence to back up this claim.  Judge Altman said an affidavit "from an attorney that worked closely on this case and on the review of the audit" corroborated the cost of the audit.

A recent Law.com story by Allison Dunn, “Judge Rejects Quinn Emanuel’s $1700 Hourly Rate Request, Slashing Fees for Virginia Settlement By Nearly 80%”, reports that a federal judge in Virginia drastically reduced Quinn Emanuel attorneys’ requested fees related to enforcing a $6 million settlement agreement they successfully obtained for a client over a fraud scheme involving the Model Tobacco Building in Richmond, Virginia.  Some of the rates requested by Quinn Emanuel—$1,690 per hour for a lead partner or $1,385 per hour for associates—were unrealistic for the Richmond market in the present case, the court found.

Quinn Emanuel attorneys based out of Washington, D.C., who served as plaintiffs’ counsel, sought prejudgment interest at a rate of 6%, as well as $236,641.18 attorney fees and costs relating to enforcing a $6 million settlement agreement between the plaintiffs, SS Richmond and MK Richmond, against Christopher A. Harrison, the owner and manager of several entities including, The C.A. Harrison Cos., CAH Model Tobacco and the McKenzie Blake Development Co.  Under the settlement agreement, the Harrison defendants were obligated to pay the $6 million payment by June 8, but the plaintiffs maintain that they have failed to do so, according to the district court’s opinion.

The plaintiffs had accused the defendants of “‘a pattern of bank fraud, wire fraud, mail fraud and money laundering in an effort to seize control and interest in a project to purchase and refurbish’” the Model Tobacco Building, which previously served as a factory for the United States Tobacco Co.  Harrison’s counsel from midsize firms Mahdavi Bacon Halfhill & Young, as well as Fraim & Fiorella, opposed the plaintiffs’ request.  The defendants argue that the plaintiffs failed to establish the reasonableness for such hourly rates.

The judge agreed in part with the plaintiffs that, in addition to the prejudgment interest, they were also entitled to attorney fees and costs, but Novak also sided with the defendants in finding Quinn Emanuel’s more than $1,000-per-hour rates for both partners and associates in post-settlement motions were ”not reasonable in accordance with the Court’s prior decisions and the Richmond legal market,” the opinion said.  Considering the reasonable rates for attorneys in Richmond with comparable skills, experience, reputation, as well as other factors, Novak reduced Quinn Emanuel’s total fee award to $50,380.

“Our client is focused on the Model Tobacco project.  As to fees, we don’t agree with everything the judge wrote, but Judge Novak obviously took the time to write a thoughtful opinion,” said George R. A. Doumar, an attorney with Mahdavi Bacon, representing the defendants.  “The local market dictates hourly rates awarded, and Quinn Emanuel was seeking rates far higher than I’ve encountered for fee awards in Virginia courts.  The lawyers I see day in and day out are billing at much lower rates.  The judge also seemed to be aware of law firm billing practices such as block billing and multiple reviews, and took that into account.”

Novak concluded that a rate of $650 for the lead partner and $400 for associates was a reasonable rate based 12 factors such as time and labor expended; the novelty and difficulty of the questions raised; the customary fee for like work; the amount in controversy and the results obtained; the experience, reputation, and ability of the attorney; attorney fee awards in similar cases and more.

“Here, Plaintiffs have failed to rebut the presumption that the hourly rates should be derived from the community in which the court sits. While Plaintiffs argue that this case has factual connections to Washington, D.C., and that the underlying case involved ‘complicated, high-stakes claims in financial fraud and RICO claims,’ … they present no evidence that a local attorney could not have provided competent representation,” Novak wrote, citing Rehabilitation Association of Virginia, Inc. v. Metcalf (1998).  “Because Plaintiffs have not made the requisite showing to apply out-of-town rates, the Court will consider the proper market from which to determine reasonable hourly rates as the market where the Court sits—Richmond, Virginia.”

The plaintiffs failed to file any affidavits from other law firms regarding “the prevailing market rates in Richmond for similar work,” and said Quinn Emanuel proffered no cases concerning fee awards within the district, Novak held.  Additionally, the law firm cited a news article from Law.com publication The American Lawyer titled, “What $1,000 an Hour Gets You in the AM 200 Today.”  The judge, however, said the article didn’t weigh in the law firm’s favor since it “cut against the reasonableness of the Plaintiff’s requested fees.”

In one of the cases cited by the plaintiffs, Proofpoint v. Vade Secure, a 2020 opinion by the U.S. District Court for the Northern District of California, the requested hourly rates ranged from $590 to $675 per hour for associates, and $880 to $915 per hour for more senior attorneys, the opinion said.

“Here, in contrast, Plaintiffs charged $1,305 per hour (Paul Henderson) and $1,385 per hour (Nicholas Inns) for the associates who performed most of the work and $1,690 per hour (Keith H. Forst) for the lead partner. … Even after accounting for inflation and the 15 percent discount applied here, Proofpoint does not support the hourly rates requested in this case,” Novak wrote, further concluding no fee would be awarded for paralegal work because the plaintiffs failed to present evidence of the customary rates billed in Richmond.  Novak concluded that the majority of the plaintiffs’ expenses were reasonable and included them in the award, bringing the total to $51,271.86 in fees and costs.

A recent Law 360 story by Dorothy Atkins, “’Alcon’s $1.2M Sanctions Fee Bid For Its MoFo Attys Slashed”, reports that a New York federal judge slashed Alcon Vision's $1.17 million fee request for its attorneys at Morrison Foerster LLP after securing sanctions against Lens.com over its bad faith counterclaims in a trademark dispute, instead awarding $227,000 after finding "glaring deficiencies" in the fee request.  In a 20-page opinion, U.S. District Judge Nina Gershon rejected Alcon Vision LLC's seven-figure request for attorney fees due to the numerous deficiencies and lack of supporting documentation provided by its legal team at Morrison Foerster.

Instead, the judge reduced the fee request as proposed by Lens.com, and she gave the company and its counsel 60 days to pay the fee award.  The sanctions award and fight over fees is the latest development in hotly contested intellectual property litigation that Texas-based Alcon, which was once owned by Novartis AG, kicked off in January 2018.  Alcon accused Las Vegas-based rival Lens.com of selling its trademarked products without permission and with outdated packaging in New York.

Lens.com hit back with antitrust counterclaims in February 2019, claiming Alcon was attacking it just to "ingratiate itself" with eye care providers that would "reward" Alcon by prescribing their customers its lenses.  But in July 2022, the judge slapped Lens.com Inc. and its attorneys with sanctions for filing bad faith counterclaims.  The judge found that the website's counterclaims served no legitimate purpose and were filed to "harass, and cause delay, expense and vexation to Alcon."  The judge ordered Lens.com and its counsel to pay Alcon's costs and attorney fees "caused by its bad faith and vexatious filing and maintaining" of its counterclaims, as well as fees arising from Lens.com's refusal to produce discovery.

The judge also called Lens.com's counterclaims in the dispute "problematic from the start," and ordered Alcon "to file an affidavit setting forth the costs and attorneys' fees for which I have found Lens.com and its counsel jointly and severally liable."  In response, Alcon's lead counsel of Morrison Foerster filed a seven-page declaration seeking $1.17 million in attorney fees for approximately 1,700 hours of work on behalf of 14 attorneys, including partners and associates, and four paralegals.

But Lens.com fired back, arguing that the fee request is excessive, unsupported and doesn't include time records or invoices.  Lens.com also argued that the declaration improperly seeks a single blended rate for its attorneys and an unidentified "standard hourly rate" for its paralegals, rather than the prevailing rate in the district, among other purported deficiencies.  Lens.com argued that it shouldn't have to pay anything in fees due to the legally deficient fee bid, but at most, Alcon should only be entitled to $227,000 in fees.

Judge Gershon mostly sided with Lens.com on the matter.  Her order noted that Morrison Foerster's declaration had "no supporting documentation and little detail" to support the fee calculation.  She rejected Alcon's assumption in the declaration that it is entitled to recover fees that it already paid to Morrison Foerster in connection with the sanctioned conduct, regardless of whether those fees were reasonable.  The judge concluded that ultimately Alcon's fee bid has "glaring deficiencies," including "vague" billing entries, and hundreds of hours of work invoiced in impermissible block billing, or lumping multiple distinct tasks into a single billing entry.

"Here, Alcon has not even attempted to justify, let alone sufficiently justified, as reasonable the hours or rates sought," the order says.  Although the judge noted that she could deny the fee request in its entirety due to the declaration's lack of support, she declined to do so.  However, she also refused to let Alcon submit additional support for its fee request, because the company didn't request permission to supplement the record, and it would require another round of briefing.

Instead, Judge Gershon agreed to adopt Lens.com's proposal to reduce the billable hours across the board by 62.4% and use a blended hourly rate of $355 for all attorneys and paralegals.  "Lens.com's proposal is well within the range of percentage reductions other courts have applied to requested hours for similar fee application deficiencies," the judge wrote, citing a New York federal judge's decision to slash a fee request by 80% earlier this year in Williamsburg Climbing Gym Co. v. Ronit Realty LLC.

A recent Law 360 story by Aebra Coe, “Law Firms See Revenue Growth Amid Soaring Billing Rates”, reports that as of the end of the third quarter of 2023, U.S. law firms had increased their revenues, on average, by 4.6% year-over-year as a result of "the highest growth in billing rates we've seen," according to a new report from Wells Fargo Legal Specialty Group.  Law firms brought in more revenue even as demand continued to lag, increasing just 0.2% as of the end of the third quarter across the cohort of more than 120 law firms surveyed by Wells Fargo, according to the report.

The rise in revenue was largely fueled by a 7.9% year-over-year increase in billing rates among all the law firms, and an 8.2% increase among the respondents ranked in the top 100 in the U.S. by revenue, the report said.  With the jump in revenue, law firms also posted an increase in net income and profits per partner as of the end of September, with net income on average increasing by 2.7% and profits per partner by 1%.  However, those results were buttressed by strong numbers reported by the largest law firms, with smaller firms faring less well.

Among the top 50 law firms by revenue, net income was up 5.2%, among the top 100 firms it was up 3.7%, and among the firms ranked in the second 100 by revenue, net income actually fell by 3.9%.  For those that performed well on net income, one major contributor was an industrywide reining in of expense growth, according to the report.  Expense growth slowed to 5.6% at the end of the third quarter, down from 6.2% midyear and 12.8% this time last year.

Alongside the differences in net income, law firms' expense growth also varied based on firm size, with the largest firms seeing smaller upticks than those among the second 50 largest and second 100 largest by revenue.  One part of the expense equation for firms is lawyer headcount, which continued to increase during the third quarter, although at 3.5%, the pace was slightly slower than in the previous year.

Because of the flat demand and increases in headcount, lawyer productivity among the cohort remained low, with an average annualized pace of 1,540 billable hours per lawyer, maintaining levels logged midyear that are well below 2018, 2019 and 2021 figures, the report found.  Of the more than 120 law firms surveyed by Wells Fargo for the report, 65 were among the 100 largest in the U.S. by revenue, 30 were among the second 100, and the remainder represented regional law firms, according to the bank's legal specialty group.

A recent Law 360 story by Bonnie Eslinger, “Meta Tracking Class Lowers Atty Fee Bid After Judge Criticism”, reports that counsel for Facebook users took another shot at getting approval for the fees they'll receive from Meta's $37.5 million deal settling class claims that it tracked 70 million users' locations, dropping the request by $500,000 since the judge said their $9.3 million request is "not going to happen."  In a renewed motion for attorney fees and expenses filed, class counsel noted that while they initially asked for a 25% cut of the settlement, at the court's urging, they've reduced their request to 23.5%.

The request argues, however, that in light of class counsel's "tremendous effort" and "tremendous recovery" compared to similar class settlements, they shouldn't have to deviate from the one-quarter award that's usually considered a benchmark for such cases.  "But, to demonstrate their unflagging commitment to the interests of the class and their respect for the court, class counsel now request only 23.5% of the common fund," the motion states, later adding that the percentage calculates out to $8.8 million.  The five-year case was not easy to litigate, the plaintiffs' lawyers told the court.

Beyond the briefing to fight Meta's motions to dismiss in the case, "counsel faced a formidable opponent that resisted discovery at every turn," the motion states.  The lawyers for the class invested considerable time and effort to get the evidence they sought from Meta, which was represented by "two of the top defense firms in the world," Gibson Dunn & Crutcher LLP and previously Munger Tolles & Olson LLP, the motion underscores.  Last month, the judge overseeing the case held off giving final approval to the deal, criticizing the 1.3% claims rate as too low and saying the $9.3 million attorney fee request is "just not going to happen."

In the revised attorney fee request, the lawyers for the class also addressed the court's concerns about the fact that time spent on a related case that was dismissed was included in the attorney fee calculation, that the fees of too many lawyers were included in the request, and that additional support was needed to justify counsel's hourly rates.

As to the first concern, class counsel said the two cases "were inextricably intertwined" as of December 2019, when the lawyers who filed each complaint agreed to work together and the cases were related for purposes of coordination.  A significant portion of the discovery requests were done by the lawyers in the dismissed case, the filing adds.  In addition, "numerous factual and legal theories developed" in the dismissed case were used in the case that settled, now before the court, the motion states.

However, in light of the court's comments at the hearing, class counsel told the court that it removed some of the hours specifically associated with the now-dismissed complaint, although it kept some of the time associated with the discovery.  With regard to the court's second concern about the billing including too many lawyers, the motion states that it removed all hours from the tab for attorneys who billed for under 40 hours of work.  The cuts resulted in 1,307 fewer hours and removed from the original fee motion, class counsel told the court.

In their motion, class counsel also argues that the $37.5 million deal is "substantial" and compares to similar data privacy settlements, for which the lawyers were given at least 25% of the fund.  The attorney fee request also highlights the fact that class counsel worked on a contingent basis.  "With no guarantee of recovering anything for their efforts, plaintiffs' counsel advanced 9,839.5 hours and $309,524.79 in expenses, while facing unusually heightened risks of no recovery, for over four years," the motion states.

The filing also argues to the court that class counsel's hourly rates are consistent with market rates.  Documents submitted to the court showed hourly rates for the highest paid lawyers at each class counsel firm that included $997 per hour for Sabita Soneji, a partner with Tycko & Zavareei LLP; $1,050 for Barrett Vahle, a partner with Stueve Siegel Hanson LLP; $1,000 for Franklin Azar of Azar Firm; and $940 for Ivy Ngo of the Law Office of Ivy T. Ngo.

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