THE GAP BETWEEN ATTORNEYS AND JUDGES
their account. It was a nightmare.
Two things emerged. One, no matter
that the cover letter that we sent out
with the statement said “this is for
information only”, a fair number of
recipients sent money. Or called to say
they couldn’t send money. Or raged
that they wouldn’t send money.
They entirely missed the point that the
statement was for information only.
As
an
experiment
in
client
communication, it failed horribly.
The second defect in the process
involved the fact that the time entries
were unedited. When we review
time records in preparation of a fee
application, we edit the time entries for
clarity of description and for whether the
time spent was properly billable. We
zero out some charges; we discount
bills if it seems there is a disconnect
between the time spent and the result
achieved. But we don’t invest that
time until we’ve decided to file a fee
application.
So the client was seeing what was
a rough draft of a bill. It wasn’t our
proposed bill. So it was confusing and
upsetting to some clients.
duration and feasibility of the plan,
the admonition to counsel to file fee
applications “earlier and with more
frequency” runs counter to a local,
judge-made rule about fee applications.
Poor story telling may be responsible for
the outcome in the case in question. To
the extent that’s the case, the applicant
is challenged to put more flesh on the
bones of the time records.
The
judges’
guidelines
for
compensating attorneys for the cost
of preparing a fee application attempt
to mandate a cap on that cost at 5%
of the amount sought. That may work
well in a Chapter 11 where the fees are
in the tens of thousands of dollars; it
is artificial and ill-suited to modest
Chapter 13 cases.
Personally, I relish writing the narrative
in a fee application, because it’s often
the only chance I get to tell judges
what it’s like, behind the scenes, in a
consumer bankruptcy practice. I see
this as an educational opportunity,
running from bar to bench, rather than
vice versa.
The application we are discussing
sought $6275 in fees. Five percent
of that sum is $314. That is seldom
enough to cover the real cost of
preparing the application, which
requires drafting a narrative, slicing
and dicing the fees involved between
different professionals and different
matters, and providing notice to
creditors and the client.
Imagine that counsel had sought those
same fees in two applications: the
guideline for the preparation of the
application would allow $157 for each
application. The client would incur the
cost of the attorney’s appearance at
two hearing rather than one.
We stopped doing it.
Until that cap on the cost of preparing a
fee application is made consistent with
the real world of consumer practice,
following the court’s admonition to
apply early and often would increase
the uncompensated time that debtor’s
counsel commits to a case.
Apply for fees early and often
Time for story-telling
The court’s second point raised sua
sponte went to the timing of the fee
application toward the end of the
case. Setting aside the issue of the
impact of the fees sought on the
That’s the view from this side of the
gap about attorneys’ fees and the
bankruptcy regimen for getting paid.
The only communication it seemed to
effect was the confused or combative
phone calls about the statement.
36
CONSUMER BANKRUPTCY JOURNAL
Winter 2016
But we need to be mindful that
an attorney owes the client a duty of
loyalty. Too often, if I were to be utterly
candid in my narrative of the case, I’d
write that the client is ill-organized,
unsophisticated or worse, pig headed,
afraid, or distracted. That all may be
true, but getting paid fairly shouldn’t
require attorneys to belittle or judge our
clients in the process.
That’s my story and I’m sticking to it.
National Association of Consumer Bankruptcy Attorneys