Attorney fees can be a significant issue in domestic cases—for both the client and the attorney representing the client. Generally, the trial court can award a reasonable amount of attorney fees to one of the parties, after the court considers the parties’ respective financial resources. These awards are almost always discretionary. In exercising its discretion, and in determining the precise amount of an award for attorney fees, the court will review the requested fees for “reasonableness.” Almost uniformly, a court will not order one party to pay an unreasonable fee to the other for a domestic fee award. The obvious question becomes: what is a reasonable fee, and how is that fee proved?
For virtually all fee awards, the initial consideration is whether the award of fees complies with the applicable rules of professional conduct—a court is unlikely to require a party to pay a fee that it believes is unethical. Thus, in most jurisdictions, the initial analysis is pursuant to the applicable rules of professional conduct. After this initial threshold is examined, the court may apply additional analysis to determine if the fee is objectively reasonable for the case—frequently, this is under a “lodestar” analysis. Finally, at all stages, a court may make adjustments to the fees to account for improper or insufficient billing and to account for unreasonable and unnecessary fees.
Generally, under any analysis, the party requesting fees has the burden of proving that the party is entitled to them, and it generally remains counsel’s burden to prove and establish the reasonableness of each dollar, and each hour, above zero. The first question of reasonableness will involve consideration of both the reasonableness of the attorney’s hourly rate and the necessity for the hours billed.
Methods of Establishing the Reasonableness of Fees
Rules of Professional Conduct, Rule 1.5
Given the discretion inherent in this area, there is no precise rule or formula for determining attorney fees, and trial courts consider a variety of factors in determining the reasonableness of a fee request. While this variation exists between jurisdictions and judges, any examination of the reasonableness and necessity of attorney fees must start with an examination of the rules of professional conduct.
The rules of professional conduct generally set forth a number of factors that should be considered in determining whether a lawyer’s fees are reasonable. While these rules establish ethics standards governing an attorney’s conduct, they have also been utilized repeatedly by courts in their examination of the reasonableness of attorney fees.
The rules of professional conduct identify precise factors to be considered in determining the reasonableness of a fee. These factors form the basis upon which a report, an affidavit, or testimony can be organized—frequently in a fashion with which the court is familiar. For example, a court will likely consider the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly. Presentation to these issues permits an opportunity to advocate concerning the fees and the underlying claims. A court will also consider the complexity of a given case and issues—undeniably, complex and novel cases require more work. In addition to sheer volume, complexity may require work at a higher skill level, justifying a higher hourly rate for attorneys who have the experience, reputation, and ability to perform the work given the complexities of the case. The amount in controversy also directly impacts fees.
The fee may also be tested by the results actually obtained in the case—while this should not convert cases into contingency fee cases, results matter in determining a reasonable fee. This focus on results should be tempered with the reality that novel issues have outcomes that are uncertain. Similarly, the fee is frequently tested by the amount at controversy—seeking a fee in excess of the awards at issue can create daunting challenges. Nor should a focus on results operate to chill advocates and clients to pursue difficult cases.
There are several other issues frequently addressed, but not particularly germane to domestic cases: whether the acceptance of the particular employment will preclude other employment by the lawyer; the time limitations imposed by the client or by the circumstances; the nature and length of the professional relationship with the client; and whether the fee is fixed or contingent. While a report or testimony may not present on these issues, they should be noted for the court.
The final element, “the fee customarily charged in the locality for similar legal services,” invites an objective analysis of reasonableness.
An objective analysis of reasonableness can be presented, quickly and rationally, with a lodestar analysis. Indeed, in addressing the reasonableness and necessity of an attorney fees request in domestic and family law cases, courts are frequently moving toward this lodestar analysis. At its most basic, the “lodestar” amount represents the number of hours reasonably expended multiplied by a reasonable hourly rate to perform the assigned task(s). Each task presents with a specific time and skill requirement, and when all relevant billing units are combined, the total operates as a lodestar. The lodestar award is intended to be objective, and once calculated it carries a strong presumption of reasonableness.
Given sufficient specificity in the billing statements, counsel should be able to present a loadstar amount in domestic cases. A lodestar calculation is overwhelmingly used in nondomestic, civil proceedings, and judicial officers serving in general or mixed dockets will be familiar with it. There is a distinct trend toward adopting and applying a “lodestar” analysis to requests for attorney fees in domestic cases.
Once the lodestar amount is determined, that basic amount may be adjusted upward or downward by application of a variety of factors, including the degree of success achieved and the amount at issue, as well as the other factors set forth in the applicable rules of professional conduct. Again, however, a fee may not be adjusted to the point that it becomes unreasonable or unethical.
As referenced above, a calculation of a lodestar amount involves a determination of the reasonable hourly rate for counsel and staff, which is then multiplied by the reasonable number of hours for counsel and staff. It is frequently expressed as a summation of attorney time and rate and staff time and rate.
Frequently, and as a matter of courtesy, the reasonableness of an attorney’s hourly rate is agreed upon; however, the determination of a reasonable hourly rate for a given professional should not be dismissed. The reviewing attorney should examine the underlying fee agreement. While the existence of the fee arrangement is a factor in determining the reasonableness of a requested fee, it is not dispositive. A request for an hourly rate in excess of the fee agreement is not likely to be successful. Thus, counsel must always be prepared to address issues concerning the reasonableness of an attorney’s hourly rate when compared to attorneys with similar training, experience, and reputation in the jurisdiction. Investigation and expert testimony on this issue may be necessary.
Where an attorney is trying to prove his or her own fees, whether by affidavit or otherwise, the attorney should also address the issues of reasonable comparable rates. After investigation, an attorney can delineate that he or she is familiar with the hourly rates charged by similar lawyers, paralegals, and staff in the appropriate geographic area and compare those rates to the attorney’s own rates.
A determination of a reasonable number of hours expended for each billable unit is a much more difficult analysis. It involves a review of the file, including (and by no means limited to) the pleadings, correspondence, discovery, and transcripts, if any, for discrete legal work and events. With a review of this material in mind, a comparison of these events with the billing statements should occur with an estimate of the time reasonably expended to complete the assigned task. Counsel’s own experience, and occasional investigation, should be used to determine this benchmark. The amount in controversy must be considered as well as the reasonable objectives of a client. It is frequently difficult to second-guess the work actually performed and billed by counsel; it must, however, be done.
An attorney’s billing statements can operate as a starting point for an analysis; however, in determining a lodestar, counsel must consider whether adjustments should be made to increase, or decrease, the specific work performed.
The proof necessary to support an attorney’s fees award should not be taken for granted. The appellate records are replete with instances of failed shortcuts and quick efforts to prove fees. In virtually every instance, testimony and/or evidence is necessary to support an award of fees. That testimony may include the retention of an independent expert to present evidence on these issues. The standards for the admission of such testimony are well established. Generally, a trial court may admit expert testimony if the testimony will assist the trier of fact to understand the evidence or to determine a fact in issue. In order to determine the admissibility of expert witness testimony, the court will make a two-tier determination: (1) The testimony must assist the court to make an informed determination of the issue and (2) the expert witness is qualified to present such evidence. In making this determination, a court must also necessarily find that the expert’s proposed testimony is both relevant and not unfairly prejudicial.
Alternatives to live testimony exist, including presentation of written proof of attorney fees. While affidavits of attorney fees are routine, the impact of these affidavits is not. Counsel must know the way that the jurisdiction, and at times the judge, will react to presentation of evidence through an affidavit. Second, because the writing is, in essence, an expert opinion, it must identify a sufficient basis to be considered. Attorney billing statements are also submitted to the courts. However, at all times, care should be taken to prevent an inadvertent disclosure of attorney-client or work-product information while seeking fees. Careful redacting of the referenced billing statement is often required.
Exclusions from Fee Awards
Obviously, in resolving a request for fees, the court will exclude from the initial calculation the hours that were not reasonably expended on pursuing the case. Indeed, a fee application must exclude hours that would be unreasonable to bill to a client, and therefore to one’s adversary, irrespective of the skill, reputation, or experience of counsel. Deductions are frequently incurred for hours that are excessive, redundant, or otherwise unnecessarily taken or for the overstaffing of a given case. Exclusions for unnecessary or excessive time expended are left to the discretion of the court. In referencing reasonableness, counsel must make a distinction between those fees that are subjectively reasonable (i.e., those fees reasonable to the client) and objectively reasonable fees.
Second, a court may reduce the number of hours reasonably expended for redundancies, excessive conferences, and other factors. Redundancies occur when several billing personnel perform and bill for the same work. Excessive conferences may occur when two billing units bill for the same conference and one of the billers did not bring value to the client. Similarly, repeated or repetitive conferences can become excessive, depending on the particular needs of the case.
Courts may also reduce fees due to block billing. Block billing is a type of time keeping that involves stating the total daily time spent working on the case, rather than separating out the time into individual entries describing specific activities. Block billing is treated as a failure of proof. Indeed, some courts have suggested that block billing is a deviation from the standards of practice. Depending upon the law of the jurisdiction and the facts of the case, block billing may justify a percentage reduction in fees. This adjustment should be made as a percentage of the total number of hours actually claimed in a given case. However, some jurisdictions adjust the lodestar amount to account for block billing, rather than adjusting the total number of hours claimed.
Nonspecific billing entries may also create a failure in proof. Where a time entry does not contain sufficient information to evaluate whether the time spent was either reasonable or necessary, or to properly attribute a given time entry to a specific claim, it may be ignored by the court. Generally, there is not a requirement for extensive detail; however, an entry must contain enough details to understand the task and time. In other words, at a bare minimum, it must reasonably identify the nature of the services performed.
Family law cases can be difficult for both participants and practitioners. Proof of the reasonableness of attorney fees should recognize this difficulty and should involve a multilayered approach. Central to that approach is the application of the rules of professional conduct to a fee request. Again, domestic courts will not award fees that are objectively unreasonable. This objective determination is best presented under a lodestar analysis through the use of an expert or, if appropriate, the lawyer’s own testimony.