Byte of Prevention Blog

by Jay Reeves |

Judge Calls Fee Request Highway Robbery

gavel Here’s a free risk management tip: it’s never a good thing when the judge calls your request for attorney fees “an April Fool’s Joke” and “highway robbery without the six-gun.”

It happened in New York, where a judge slashed a $464,000 fee request from Greenberg Traurig by nearly 40 percent for what he termed “gold plated lawyering” in an otherwise unexceptional case, reports the ABA Journal.

In the July 11 opinion, the judge said he was “troubled, almost haunted, by the idea of awarding almost half a million dollars to attorneys who simply prevailed upon a court to dismiss an untimely proceeding.”

The case arose when a housing co-op on Manhattan’s Lower East Side switched from a park-and-lock system to valet parking. Five tenants sued.

After the case was dismissed, Greenberg Traurig, representing the co-op, petitioned for $464,164 in attorney’s fees. Judicial fireworks followed. Read the opinion here.

Paying for a Limo When a Sedan Would Do the Job

Judge Arthur Engoron’s order is notable for many reasons, not least of which is his fee analysis:

  • On one hand: “[T]his Court is troubled, almost haunted by the idea of awarding almost half a million dollars to attorneys who simply prevailed upon a court to dismiss an untimely proceeding, and not in the context of industrial or technological behemoths battling for market supremacy…. shocking and disturbing, highway robbery without the six-gun. Society cannot devote such huge resources to such a simple court proceeding (which, after all, accomplished nothing) and survive, much less prosper. Such an outrageous figure sounds like a typographical error or an April Fool’s joke…. [T]hat same $464,164 (incidentally, more than twice the $208,000 annual salary of a New York State Supreme Court Justice – 223% to be exact), could buy you a one-bedroom co-op apartment on the Upper East Side of Manhattan, at First Avenue and 72d Street, a stone’s throw from the new Second Avenue Subway Line, with a 24-hour doorperson, live-in resident manager, concierge, laundry room and on-site parking garage.”
  • On the other hand. “GT’s papers are long, and they are beautiful: well-organized, well-written and well-reasoned…. Fish gotta swim, birds gotta fly, and lawyers gotta litigate…. GT did what lawyers do: submitted excellent papers, and prevailed.”

Judge Engoron suggested another approach would likely have yielded the same result: “[T]he partner in charge could have walked out into the hallway, grabbed the first mid-level associate that walked by, and said, ‘Our client is being sued; it’s untimely; get it dismissed.’”

The awarded fee of $175,000, the judge noted “could buy you a 55-foot yacht, equipped with multiple staterooms, a salon/galley/dining area, a washer-dryer and stall showers.”

NC State Bar Rule 1.5: Fees

(a) A lawyer shall not make an agreement for, charge, or collect an illegal or clearly excessive fee or charge or collect a clearly excessive amount for expenses. The factors to be considered in determining whether a fee is clearly excessive include the following:

            (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

            (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

            (3) the fee customarily charged in the locality for similar legal services;

            (4) the amount involved and the results obtained;

            (5) the time limitations imposed by the client or by the circumstances;

            (6) the nature and length of the professional relationship with the client;

            (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

            (8) whether the fee is fixed or contingent.

Sources:

NC State Bar Rule 1.5 https://www.ncbar.gov/for-lawyers/ethics/rules-of-professional-conduct/rule-15-fees/

About the Author

Jay Reeves

jay.reeves@ymail.com | 919-619-2441

Jay Reeves practiced law in North Carolina and South Carolina. Over the course of his 35-year career he was a solo practitioner, corporate lawyer, legal editor, Legal Aid staff attorney and insurance risk manager. Today he helps lawyers and firms put more mojo in their practice through marketing, work-life balance and reclaiming passion for what they do. He is available for consultations, retreats and presentations.

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