Office of Bar Counsel

• Publication year: 2024
• Citation: Vol. 47 No. 4

Office of Bar CounselVol. 47 No. 4 Pg. 10Wyoming Bar JournalAugust 2024

Melinda S. McCorkle

Exercising Billing Judgment: The Interplay Between Rule 1.5, the Lodestar Test and Reasonable Fees

Wyoming Rule of Professional Conduct 1.5 (Fees) mandates that a lawyer "shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses." It further identifies several factors to be considered in determining whether the fee is reason-able.^[1] While the factors are instructive guidelines, they provide little guidance about the daily application of exercising billing judgment.^[2] The statement most applicable to billing judgment is found in Comment 5 to Rule 1.5: "A lawyer should not exploit a fee arrangement based primarily on hourly charges by using wasteful procedures."

In 2014, the Court reviewed the lodestar test and billing judgment to consider whether Respondent violated Rule 1.5. This case is significant because it is the first application of the lodestar test to a disciplinary case, demonstrating that failure to exercise billing judgment may violate Rule 1.5.

For guidance regarding billing judgment, we must review Wyoming Supreme Court decisions discussing the reasonableness of fees incurred on an hourly basis in both disciplinary and non-disiplinary cases.^[3] Wyoming has adopted the federal "lodestar" test to determine whether fees are reasonable.

Melinda McCorkle is Deputy Bar Counsel for the Wyoming State Bar's Office of Bar Counsel.

The lodestar test requires that two factors be considered: (1) whether the fee charged represents the product of reasonable hours times a reasonable rate; and (2) whether other factors of discretionary application should be considered to adjust the fee either upward or downward.....[T]he claimant must present not only an itemized billing reflecting the time and the rate, but there must be evidence demonstrating that the fee was reasonable.^[4]

In 2013, the Court addressed hourly fees and the lodestar standard in two non-disciplinary cases.^[5] The Court emphasized the importance of billing judgment, which is usually shown by writing off "unproductive, excessive, or redundant hours."^[6]The Court cited several examples of the attorney's failure to exercise billing judgment, such as billing his hourly rate for clerical work such as walking to the courthouse to retrieve documents, stating "clerical or secretarial tasks ought not to be billed at lawyers' rates, even if a lawyer performs them."^[7]The Court also identified excessive billing. For example, the attorney billed 19 hours in a day on six separate occasions, leading the Court to query, "one must ask: when did the attorney sleep, eat, and take care of other personal matters."^[8]

In 2014, the Court reviewed the lodestar test and billing judgment to consider whether Respondent violated Rule 1.5.^[9] This case is significant because it is the first application of the lodestar test to a disciplinary case, demonstrating that failure to exercise billing judgment may violate Rule 1.5. An important takeaway from this case is that minimum billing increments are acceptable, and indeed, a "useful tool," unless the increments are "unreasonably large or are used in an abusive manner."^[10] In this case, the Court held that 15-minute minimum billing increments...