Fee schedules are legal!

Fee schedules have been outlawed for many years, since the matter was decided by the US Supreme Court in the 1960s. But, I have just learned that the US Government, itself, uses a fee schedule in arguing for or against fee applications (where “fee shifting” to the “prevailing party” for “reasonable attorney’s fees” is permitted by statute) and in deciding what to offer outside counsel it employs on various matters.

See, the schedule prepared by the United States Attorney’s Office for the District of Columbia. This schedule is based on a 1983 case, Laffey v. Northwest Airlines, Inc..  Thus, this is now called the “Laffey Matrix” or the “”United States Attorney’s Office Matrix.”

In addition to the Laffey Matrix, there are other surveys and guidelines available for attorneys who want to benchmark or test their rates with others. One such guideline is prepared by a national court reporting service. This company reviews the fee applications of counsel in Bankruptcy Courts all over the country. In bankruptcy matters, counsel generally cannot take fees from the debtor without court approval; to get such approval, counsel must file a fee application and this is a matter of public record.

As in other matters, court rulings can be circumvented with a little time and ingenuity, as well as entrepreneurial spirit … in this case, the court reporter service charges for the survey. The information, however, can be a valuable assist in setting your fees.  Helped by additional market intelligence and personal insight of your practice and sensitivity to your own clientele.

Categorized in: Cash Flow - Finances