Colorado Court finds that Efficiencies of Scale Should Reduce Attorney Time

Posted on January 12th, 2017 by Legal Fee Advisors

By Erisa Qyra.

A reduction to a fee award in a Federal District Court of Colorado’s case, Shabazz v. Pinnacle Credit Services LLC, demonstrates the Court’s concern with excessive attorney’s fees caused by inefficiencies. The Court found that the Plaintiff’s fee request was excessive due to the fact that the litigation, regarding a routine Fair Debt Collection Practices Act (FDCPA) matter, was not complex and “the efficiencies of scale” that the attorney had achieved through his expertise should have enabled “small investments of time” compared to the amounts he sought.

The Court found that the attorney’s time was excessive in light of the fact that the attorney was well accustomed to similar legal issues that arose in routine FDCPA matters, having previously resolved over 2,300 of them. The Court held that the attorney’s familiarity with the issues created an “efficiencies of scale” that should have enabled nominal time to be charged through the use of form pleadings, motions, and discovery requests. These efficiencies, however, were not reflected on the attorney’s billing records. For instance, the attorney billed 4.1 hours for drafting six deposition notices, four hours drafting the instant motion and four hours drafting the instant motion’s reply. These time entries were held to be excessive given the attorney’s experience and reputation as a “leading specialist in this type of litigation.”

Further, the Court found that the attorney billed for tasks that appeared to be clerical such as “reviewing the return of service” and “mailing deposition notices”. There were also charges for non- billable work such as scheduling airfares to take depositions. The Court found that some of these administrative tasks should have been performed by clerical staff. There were also numerous communication entries that did not indicate substantive messages such as “email to defense counsel re case” or “phone call to defense counsel re case”. The Court reasoned that these emails could have been administrative in nature and it is the plaintiff’s burden to submit “meticulous time records,” with the Court finding the fee request was inadequate in delineating how the attorney’s time was spent.

Accordingly, the Court held that the fee request was excessive and warranted a 20% fee reduction to account for the inefficiencies and clerical charges discussed above.

This case demonstrates the importance of developing efficient legal billing practices for firms and individual attorneys, with the use of form documents encouraging reasonable “efficiencies of scale.” Firms are expected to provide fee requests containing reasonable amounts of time and detailed descriptions of substantive attorney work reflecting the experience and practices of seasoned counsel. In this instance, the attorney spent 117.1 hours on this case, with the Court determining that only 93.68 hours reflected efficient legal billing.

 

Shabazz v. Pinnacle Credit Servs. LLC, No. 15-CV-0687-WJM-NYW, 2016 WL 6892948, (D. Colo. Nov. 23, 2016)

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