Consumer Bankruptcy Journal Winter 2016 - Page 36

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