General Rules in Creating Fee Applications (With a Side-Dish of How to Act as Local Counsel)

By Nancy Rapoport, Gordon Silver Professor at the William S. Boyd School of Law, University of Nevada, Las Vegas (a/k/a Ms. Ps & Qs)

  • Be really, really clear about what you’re doing as you report your time. Don’t just say “review pleadings”–say “review pleadings filed on X day,” so that the court can tell what you actually read without having to go back through the docket and guess. Don’t just say “review and respond to emails”–say “review and respond to emails from unsecured creditors about X.” Break down your prep time from your travel time (often, travel time is billed at half-rate) from your time in court, because most courts won’t let you block bill more than .5 hours a day. (And you should bill your time in .1 increments.)
  • If you are acting as local counsel, it is totally OK (and appropriate) for you to read everything that the national firm wants you to file. It’s your bar card that’s at stake when you file something. Ask the national firm to give you as much lead time as possible so that you have time to make sure you’re comfortable with what you’re supposed to file.
  • Watch those expenses, and warn national counsel that what may play well in some other jurisdictions might not play well in yours. E.g., I’ve seen some non-atty professionals think that staying at fancy hotels and having wine w/dinner are OK to bill the estate. And in one of the cases I reviewed, an attorney BILLED A SHIRT to the estate. (He kept the shirt.) Not the best idea for him (and the time he spent deposing me on why I had objected to that part of his bill wasn’t his finest hour, either).
  • If the court allows appearance by phone and you don’t plan to have a speaking role in a particular hearing, go ahead and appear by phone if that will save fees and expenses. (Don’t forget that your phone operates as a live mike, though. We’ve all seen the faces that people make when they hear food being eaten during a hearing.)
  • Get familiar with the local rules about fees–most courts have some sort of local rule linking to the U.S. Trustee Guidelines or a jazz riff of those guidelines. Pay attention to what’s ok and what’s not–especially in terms of things like overtime (usually non-compensable).
  • Allocate the tasks to the lowest reasonable biller. Partners making copies of documents will trigger lots of questions. Partners doing quick research may not. If an assistant can do something, don’t have an associate do it. If a paralegal can do something, don’t have an associate do it. But if something needs a particular level of experience, give the task to the right person.
  • Try to persuade your partners and the national firms that billing summer associate time is not a good idea. The standard is “benefit to the estate.” I was a summer associate once. I wasn’t much use to anyone then. Many clients outside bankruptcy won’t pay for summer associate time (or, for that matter, for some junior associate time); therefore, many bankruptcy courts will look askance at you billing your summer associates’ work product to the estate.
  • Watch those hourly rate increases. Even if your firm (or the national firm) raises rates each January, that doesn’t mean that the increased rates will reflect an increased benefit to the estate in YOUR case–especially if, say, you start work in December and raise your rates in January.
  • My personal favorite–don’t bill what something “should have” cost if you had drafted it from scratch. If you only swapped out names and some pertinent facts, that should take much less time than would drafting from scratch. I once saw an 8-page stay relief motion that had a 34-hour billable time record attached to it. If there’s a reason that something that looked simple to draft actually took a disproportionate amount of time, you might want to explain why (as a preemptive move) in your application.
  • If you write off time before you submit your fee application, go ahead and tell the court what you wrote off and why. Demonstrating good billing judgment throughout will build up an unofficial presumption of reasonableness in your later bills.
  • If a fee examiner asks you questions, often the examiner will be satisfied by reasonable answers. Don’t assume that the fee examiner wants to cut your bill to the bone. He or she just wants to be able to provide the court with sufficient information that the court can rule on the reasonableness of your fees.

Nancy B. Rapoport, a/k/a “Ms. Ps & Qs,” is the Gordon Silver Professor at the William S. Boyd School of Law, University of Nevada, Las Vegas. Professor Rapoport’s prior experience includes private practice, primarily in bankruptcy law, in San Francisco, and a distinguished academic career at multiple academic institutions, including serving as Associate Dean and Professor at The Ohio State University College of Law and Dean and Professor at both the University of Nebraska College of Law and University of Houston Law Center. Her specialties are bankruptcy ethics, ethics in governance, and the depiction of lawyers in popular culture.

She has also appeared in the Academy Award®-nominated movie, Enron: The Smartest Guys in the Room (Magnolia Pictures 2005) (as herself). Although the movie garnered her a listing in www.imdb.com, she still hasn’t been able to join the Screen Actors Guild. When not acting, teaching or writing, in her spare time, she competes, pro-am, in American Rhythm, American Smooth, and 9-Dance ballroom dancing with her teacher, Sergei Shapoval. You can visit her blog at: http://nancyrapoport.blogspot.com.


No Author Biography has been linked to this Article.

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