Contingency fee practice has always had its pluses and
minuses. Forget about that steady flow of checks from
hourly-rate clients. Don't even think about non-binding
case budgets that often get exceeded. And the solvency of the
defendant isn't just the client's problem. But at
least there is an overarching compensation: unlike the hourly-rate
drudges, you don't have to keep timesheets!
Trust the Supreme Court of Texas to spoil all the fun. In
El Apple I, Ltd. v. Olivas, decided on June 22, the court
effectively put an end to statutory attorneys' fee recovery
based on after-the-fact general estimates of work done and time
spent. Now, fee recovery requires, at a minimum,
"documentation of the services performed, who performed them
and at what hourly rate, when they were performed, and how much
time the work required." In other words,
The El Apple I opinion reconfirmed Texas' adherence
to the "lodestar" method of attorneys' fee
calculation, under which a reasonable hourly rate is multiplied by
the number of hours reasonably expended in pursuing the
matter. But the court was troubled by the incentives for
inefficiency that exist when fees are paid by the opposing
party. It therefore charged trial courts with the
responsibility of scrutinizing fee applications to eliminate
duplicative, excessive, or inadequately documented work. It
regarded documentary evidence as essential to permit the trial
court to properly perform this task.
The opinion requires that fee applicants provide the trial court
with substantial detail, including (1) the nature of the work, (2)
who performed the services and their rate, (3) approximately when
the services were performed, and (4) the number of hours worked.
The court acknowledged that this level of detail could
theoretically be provided from an attorney's memory, but
reasoned that in all but the simplest cases, reference to
documentation will be necessary. The court therefore held that
"when there is an expectation that the lodestar method will be
used to calculate fees, attorneys should document their time much
as they would for their own clients, that is, contemporaneous
billing records or other documentation recorded reasonably close to
the time when the work is performed." In other words,
Because of the change in the law, the court allowed the
attorneys in the El Apple I case to go back and try to
reconstruct the necessary detailed information. Perhaps Texas
courts will also allow reconstruction for tasks performed before
the opinion was issued. But going forward, the price of
failing to keep timesheets will likely be disallowance of statutory
fee-shifting recovery. Personal-injury contingency fee lawyers
can continue as before, but those who litigate commercial,
employment, or similar cases will have to, as the late Strasburger
partner Tom Unis was fond of saying, "do the Lord's work,
but keep good track of your time."
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