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Life of a Law Student, University of Houston Law Center

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Lawyers in Flight, Full-Billing Grounded

By: Luke Gilman | Other Posts by
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As I learned in Professional Responsibility this semester, nothing so stimulates the discussion as the subject of lawyers getting paid. The WSJ Law Blog’s Dan Slater piqued the ire of the inner Ayn Rand in hearts of the lawyers commenting below the fold in Traveling But Not Working? Can’t Charge Full Hourly Rate, Court Says – with a woeful tale of travel recompense found wanting:

Caplin & Drysdale was appointed national counsel for the asbestos claimants’ committee in the bankruptcy of Babcock & Wilcox, a maker of boilers and generators. The firm sought about $6.3 million in fees and costs for it services, and charged its full hourly-rate for travel time. The bankruptcy trustee objected to paying the full hourly rate for travel time not spent working, and the bankruptcy judge agreed, awarding attorney’s fees at 50% for those hours — trimming $135,685.80 from Caplin & Drysdale’s tab.

This is interesting mostly because it gives me a chance to vent about the hoary hypo of legal ethics in which a lawyer flies on business for one client, works on the case of another while in the air then charges for both. Spoiler alert – this is unethical.

This case would seem to indicate that not only can you not bill two client’s for the same time, you can’t even bill one client your full rate.

The reality is a bit more pedestrian and unsurprising result as the firm couldn’t be bothered to (1) specify in its employment agreement that it would bill the full hourly rate for non-productive travel time or (2) establish at trial that “comparably skilled practioners” charged the full hourly rate for travel time (feebly arguing that the law firm always does it that way and that the lawyer’s old firm did it that way too) and (3) they had to overcome an abuse of discretion standard on appeal.

Tellingly the court cites Henry v. Webermeier, 738 F.2d 188 (C.A.Wis., 1984) (a Posner opinion, somehow, not sure what he was doing in Cheesehead country), which vacated and remanded a decision in which the district court declined to award expenses and reduced attorneys fees when the plaintiff’s attorneys helpfully established the market rates for southern Wisconsin civil rights trial lawyers by affidavit. There’s a little more to it than that, as Posner goes on –

Moreover, to award nothing for travel time in this case would be unreasonable. As the defendants do not contend that the total number of hours that the plaintiffs’ lawyers put in on the case was excessive, the travel time must have been worthwhile, and the only question therefore is the appropriate billing rate for it. Probably that is the same billing rate as would be appropriate for the other time the lawyers put in on the case. When a lawyer travels for one client he incurs an opportunity cost that is equal to the fee he would have charged that or another client if he had not been traveling. That is why lawyers invariably charge their clients for travel time, and usually at the same rate they charge for other time, except when they are able to bill another client for part of the travel time (a lawyer might do work for client A while flying on an airplane to a meeting with client B). If, though reasonable in terms of the amount of time consumed, the travel is unnecessarily luxurious, the court should not reimburse the plaintiffs for the entire out-of-pocket expenses of travel; but that is a completely separate issue from the hourly billing rate and an issue that the defendants will be entitled to explore on remand. The presumption, which the defendants have not attempted to rebut, should be that a reasonable attorney’s fee includes reasonable travel time billed at the same hourly rate as the lawyer’s normal working time.

The analysis is typically (wonderfully, IMHO) Posnerian, in that it recognizes the appropriate starting point for determining reasonableness is not whether or not it sounds reasonable (what a tiny fraction of litigation would pass that test, I wonder…) but whether, given the alternatives and information available at the time, the lawyers and clients would have agreed to do it all that differently.

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One Response

  1. meyer says:

    Posner is a judge on the 7th Circuit, which includes Wisconsin.

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