attorney’s fees - texasbarcle · an attorney for an unsuccessful applicant where a guardianship...

ATTORNEY’S FEES

HONORABLE GUY S. HERMAN Probate Court No. 1 of Travis County, Texas

County Courthouse, Room 217 Austin, Texas 78701

Ph: 512.854.9258 Fax: 512.854.4418 [email protected]

State Bar of Texas ADVANCED GUARDIANSHIP LAW COURSE

April 4, 2014 Dallas

CHAPTER 2

mailto:[email protected]

Judge Guy Herman Probate Court No. 1 of Travis County, Texas

County Courthouse, Room 217, Austin, Texas 78701 Phone (512) 854-9258 — Fax (512) 854-4418

Judicial Career 1985-Present Judge, Travis County Probate Court No. 1

-- Appointed on May 17, 1985 -- Reelected in 1986, 1990, 1994, 1998, 2002, 2006, and 2010

1980-85 Justice of the Peace, Travis County Precinct 5

Legal Career 1978 Licensed, May 1978 1978-80 Associate, Practiced with the Law Offices of David R. Richards and Associates with

David Richards and David Van Os

Education University of Texas at Austin, B.A., 1972 University of Delhi, India, 1973 University of Texas at Austin, J.D., 1977

Professional Activities 1998-2001 Presiding Judge, Statutory Probate Judges of Texas

& 2006 –

1993 – President, Texas College of Probate Judges

Ongoing Lectures throughout the state on probate, guardianship, and mental health law

2011-2012 Served on the Texas State Bar Committee on Pattern Jury Charges – Family and Probate

2006 – Appointed to the Mental Health Crisis Services System Task Force of the Texas Department of State Health Services

2001-02 Appointed to the Mental Health Service System Task Force upon the recommendation of the Texas Department of Mental Health and Mental Retardation

1991-92 Chairperson, the Guardianship Work Group created by the Texas Senate Interim Committee on Health & Human Services

1991-92 Member of the Citizens’ Commission on the Texas Judicial System

1989 Organized the Travis County Mental Health Coordinating Council, providing agencies and advocacy groups with a forum to address concerns with the involuntary mental health service system

1986 Instrumental in the conception and formation of the Family Eldercare Guardianship Program, a volunteer guardianship program

1983 Organized, with three others, the Travis County Dispute Resolution Center, an organization committed to using mediation when possible to resolve guardianship contests involving family members

Professional Memberships Member, State Bar of Texas Member, Austin Bar Association Member, National College of Probate Judges Member, American Bar Association Life Member, Texas Bar Foundation

Attorney’s Fees Chapter 2

i

TABLE OF CONTENTS

I. ATTORNEY’S FEES: WHY AM I GETTING .5 HRS OF ETHICS? ................................................................. 1

II. FEES FOR ATTORNEYS AND AD LITEMS ...................................................................................................... 1 A. Attorney’s Fees in Temporary and Permanent Guardianships ........................................................................ 1 B. Payment of Attorney’s Fees to Certain Attorneys ........................................................................................... 1

1. Proof ........................................................................................................................................................ 2 2. Hearing on Temporary Guardianship ...................................................................................................... 2 3. Attorney’s Fees to Non-prevailing Party When Guardianship Created................................................... 2

C. Compensation When Guardian and Attorney are the Same Person ................................................................ 2 D. Contingent-Fee Contracts ................................................................................................................................ 3 E. Forfeiture of Attorney’s Fees .......................................................................................................................... 3 F. Reasonable Attorney’s Fees Are a Jury Issue ................................................................................................. 4 G. Attorney ad Litem ........................................................................................................................................... 4 H. Guardian ad Litem ........................................................................................................................................... 4 I. Ad Litem Fees Paid by County ....................................................................................................................... 6

APPENDIX 1: TRAVIS COUNTY’S ATTORNEY FEE STANDARDS ..................................................................... 7

APPENDIX 2: BLOCK BILLING .............................................................................................................................. 15

APPENDIX 3: REDACTIONS GONE WILD ............................................................................................................ 17

APPENDIX 4: A HELPFUL BILLING STATEMENT .............................................................................................. 19

APPENDIX 5: A HELPFUL BILLING STATEMENT FROM A LAWYER PR ...................................................... 21


1

ATTORNEY’S FEES I. ATTORNEY’S FEES: WHY AM I GETTING

.5 HRS OF ETHICS? Behind the statutes, case law, and rules with

which this paper largely concerns itself lies an ethical dimension that informs this topic. As a case cited in this paper points out, a court is the true protector of a ward’s estate. This is so because after fees are requested and any objections made, it is a judge’s duty to determine reasonableness and necessity. It is a judge’s signature that orders them paid.

When a court abdicates this fundamental duty and falls into the pernicious practice of simply approving applications for fees with pre-printed orders granting the fees sought, it fails in its obligation to protect the vulnerable ward. For those wishing to see what this failure looks like on an epic scale, the author encourages the reader to peruse www.azcentral.com/news/probate, where you’ll find stories (in a fine investigative series in the Arizona Republic) of somnolent courts permitting attorneys and fiduciaries to commit epic abuses.

Since a ward is by definition incapacitated, a court appoints an attorney ad litem to represent him. One obligation of that attorney is to object to unreasonable or unnecessary fees. But no court can defer to whether an ad litem objects to fee applications. Wards are the most vulnerable people a court is charged with protecting; to fail in this is to fail in a moral and ethical obligation. And now to those statutes, cases, and rules that tell us how all this plays out.

II. FEES FOR ATTORNEYS AND AD LITEMS A. Attorney’s Fees in Temporary and Permanent

Guardianships A temporary or permanent guardian is entitled to

reasonable attorney’s fees necessarily incurred in connection with the proceedings and management of the ward’s estate. Estates Code §§1155.002-1155.151 (hereafter EC). If the ward’s estate is insufficient to pay for the reasonable and necessary attorney’s fees, fees may be paid from the county treasury – but “only if the court is satisfied that the attorney to whom the fees will be paid has not received, and is not seeking, payment for the services . . . from any other source.” EC §1155.054(e).

The legislature made a change in the 2013 session long sought by bench and some of bar by enacting EC §1155.054(d). Here, in full:

“If the court finds that a party in a guardianship proceeding acted in bad faith or without just cause in prosecuting or objecting to an application in the proceeding, the court may require the party to reimburse the ward’s

estate for all or part of the attorney’s fees awarded under this section and shall issue judgment against the party and in favor of the estate for the amount of attorney’s fees required to be reimbursed to the estate.”

And in EC §1155.151(a), the Lege defined “court costs” to include “costs of the guardians ad litem, attorneys ad litem, court visitor, mental health professionals and interpreters,” and provided these costs shall be paid out of the guardianship estate (or the county treasury if the estate is insufficient), “except as provided by Subsection (c)”:

“If the court finds that a party in a guardianship proceeding acted in bad faith in prosecuting or objecting to an application in a proceeding, the court may order the party to pay all or part of the costs of the proceeding. If the party found to be acting in bad faith or without just cause was required to provide security for the probable costs of the proceeding under Section 1053.052, the court shall first apply the amount provided as security as payment for costs ordered by the court under this subsection. If the amount provided as security is insufficient to pay the entire amount ordered by the court, the court shall render judgment in favor of the estate against the party for the remaining amount.”

This provision brings guardianship litigation more in line with TRCP 141 in giving courts power to assess costs against a party acting in bad faith.

Estates Code §1155.151(d) also forecloses the argument that the parties to a guardianship proceeding could not be required to make a deposit for costs because they could not be ordered to pay the costs in a final order – the costs having to be borne by the ward’s estate. See, e.g., In re: Mitchell (Tex. App. – El Paso, 2011, no writ).

These changes upend over a century of Texas practice in which attorney’s fees and costs were paid by the ward’s estate, with no bad faith exception.

B. Payment of Attorney’s Fees to Certain

Attorneys Probate Code 665B was modified slightly but

crucially during the 2013 legislative session as it transitioned to EC §1155.054 (a):

“A court that creates a guardianship or creates a management trust under Chapter 1301 [formerly TPC §867] for a ward, on request of a person who filed an application to be appointed guardian of the proposed

http://www.azcentral.com/news/probate


2

ward, an application for the appointment of another suitable person as guardian of the proposed ward, or an application for creation of the management trust, may authorize the payment of reasonable and necessary attorney’s fees, as determined by the court, in amounts the court considers equitable and just [new language, emphasis supplied], to an attorney who represents the person who filed the application at the application hearing, regardless of whether the person is appointed the ward’s guardian or whether the management trust is created….”

In telling courts to consider what attorney’s fees are reasonable and necessary and whether that amount is also equitable and just, it seems plain a court is meant to consider such factors as the size of the ward’s estate in making an attorney’s fees award, and the Code gives a court the power to adjust accordingly.

1. Proof

Before a court awards attorney’s fees, the court must find that the applicant acted in good faith and for just cause. EC §1155.054(c). Section §1155.054 requires proof that the attorney’s services were reasonable and necessary for the preservation, management, and safekeeping of the estate. In Woollett v. Matyastik, 23 S.W.3d 48 (Tex. App. – Austin 2000, pet. denied), the appeals court reversed the trial court’s approval of attorney’s fees and expenses because the fees were not supported by any evidence or proof and did not meet the requirements of TPC §667 (now EC §1155.103). The application submitted by the temporary guardian was not verified, not itemized, not based on expert testimony, and it failed to detail the work, hourly rate, and number of hours expended. It further failed to state that the rate was reasonable and customary in the county.

2. Hearing on Temporary Guardianship

Attorney’s fees resulting from representation of a party in a hearing to determine the necessity for temporary guardianship may be assessed under EC §1251.013 against the estate or against the county if the estate is insufficient.

3. Attorney’s Fees to Non-prevailing Party When

Guardianship Created An attorney for an unsuccessful applicant where a

guardianship is created may receive attorney’s fees when the applicant has acted in good faith and for just cause in the attorney’s representation of the person filing the application. EC §1155.054 (a). If there is no money in the estate, the county can reimburse the

attorney, assuming there are funds available for this purpose. EC §1155.054 (b)(2).

C. Compensation When Guardian and Attorney

are the Same Person 1) An attorney serving as both attorney and

guardian may receive compensation for both roles, within the Code requirements. Specifically, EC §1155.052 provides:

• An attorney who serves as guardian and also

provides legal services in connection with the guardianship may not receive compensation for either service unless the attorney files with the court a detailed description of the services performed, identifying which of the services are guardianship services and which are legal services.

• An attorney providing both guardianship and legal services is not entitled to attorney’s fees for guardianship services that are not legal services.

• Compensation for guardianship services provided by an attorney serving as both attorney and guardian must be set by a court in accordance with EC §1155.003 regarding compensation of guardians and temporary guardians. Attorney’s fees for legal services provided by an attorney serving as both attorney and guardian must be set by a court in accordance with EC §§1155.054 & 1155.101.

2) Historically, many courts did not allow a

guardian to be compensated both as an attorney and as personal representative because of the difficulty in segregating legal work from guardian work. Some courts permitted this dual compensation. See, e.g., Henderson v. Viesca, 922 S.W.2d 553, 558 (Tex. App. – San Antonio 1996, writ denied); Burton v. Bean, 549 S.W.2d 48 (Tex. Civ. App. – El Paso 1977, no writ). Although EC §1155.052 now provides a basis for dual compensation, a historical perspective on when dual compensation was allowed may be illuminating.

Dual compensation was usually restricted to situations where:

• There was full disclosure of the guardian-

attorney’s request for dual compensation at the time of appointment or upon motion and hearing if the request for dual compensation


3

was made after appointment. If the request is after the time of appointment, notice of the motion and hearing should be given to all interested parties who have made an appearance in the case.

• The guardian-attorney sought only guardian’s compensation for guardian’s services and sought attorney’s fees only for legal services.

• The guardian-attorney kept meticulous records, carefully segregating legal and non-legal work, and applications for attorney’s fees gave a detailed account of the legal services rendered to the estate.

• Attorney-fiduciaries were not paid attorney’s fees for fiduciary services. For example, attorney-fiduciaries should not be paid at their Court-approved attorney-fee rate for obtaining a bond, gathering estate assets, or making health care decisions for a ward of the Court. If the attorney believes that the statutory compensation formula as applied to a particular guardianship is unreasonably low (EC §1155.006), then he or she should submit, with the annual or final account, contemporaneous time records of the fiduciary services for which additional hourly compensation is requested above the statutory fee. Note that the hourly fee approved by a court for attorney fiduciary services presumably would be significantly less than the Court-approved legal rates for attorneys.

3) Should there be a prior agreement about the

dual compensation? The Estates Code does not require a prior agreement. However, in many cases that allowed dual compensation, the courts, beneficiaries, or other parties agreed to the dual representation and dual compensation in advance. See, e.g., Henderson, 922 S.W.2d at 556; Burton, 549 S.W.2d at 50; Neblett v. Butler, 162 S.W.2d 458 (Tex. Civ. App. – Galveston 1942, writ ref’d w.o.m.). Later appellate courts construing these decisions have held that the courts’ reasoning was not based on the existence of a prior agreement or order. In re Estate of Devitt, 758 S.W.2d 601, 607 (Tex. App. – Amarillo 1988, writ denied); Epstein v. Hutchinson, 175 S.W.3d 805 (Tex. App. – Houston [1 Dist.] 2005, rev. denied). In Devitt, the court did note, however, that an agreement was the better practice. 758 S.W.2d at 607.

D. Contingent-Fee Contracts Estates Code §1155.053 provides that the personal

representative may contract to hire an attorney on a contingent-fee basis in order to collect claims or recover property of the estate. The standard contingency-fee contract limits recovery to one third of the total recovery, with the cost and expense portion of litigation borne by the ward’s share. EC §1155.053. However, upon approval of the court, a guardian may convey a contingent interest that exceeds one-third of the property for attorney’s services as long as the court approves the agreement before any services are performed. EC §1155.053(b). In approving a contract or conveyance under this section, EC §1155.053(c) requires that the court consider the following:

1) the time and labor required, the difficulty of

the questions involved, and the skill required to perform the tasks;

2) the fee customarily charged for similar services;

3) the value of the property recovered; 4) the experience and ability of the attorney;

and 5) the benefits to the estate.

As pointed out in Stern v. Wonzer, TRCP Rule 44 gives a next friend no greater authority to contract for legal services than a guardian has. Stern v. Wonzer, 846 S.W.2d 939 (Tex. App. – Houston [1st Dist.] 1993, no writ).

E. Forfeiture of Attorney’s Fees

The conduct of the guardian or attorney may cause a forfeiture of attorney’s fees. See 42A Tex. Jur. 3d Guardianship and Conservatorship §383 (2006).

1) An attorney retained by a ward who had been

adjudicated to be of unsound mind could not recover fees for legal services in a guardianship contest. Breaux v. Allied Bank of Texas, 699 S.W.2d 599 (Tex. App. – Houston [14th Dist.] 1985, writ ref’d n.r.e.), cert. denied, 479 U.S. 1002 (1986).

2) When the guardian’s omission or malfeasance is at the root of the litigation, the estate will not be required to reimburse the guardian for his attorney’s fees. Tindall v. TX Dept. MHMR, 671 S.W.2d 691 (Tex. App. – San Antonio 1984, writ ref’d n.r.e.). In Tindall, the guardian incurred attorney’s fees in defense of a bill of review filed by the State because he had neglected to notify the State of a proposed tax-motivated gift.

3) A guardian who is removed from his position is not entitled to attorney’s fees in defending


4

his acts or attempting to retain appointment. Dumitrow v. Hitt, 601 S.W.2d 472 (Tex. Civ. App. – Houston [14th Dist.] 1980, writ ref’d n.r.e.); Gordon v. Terrence, 633 S.W.2d 649 (Tex. App. – Houston [14th Dist.] 1982, no writ). But if the guardian successfully defends a suit for removal, he is entitled to attorney’s fees. Moore v. First City Bank, 707 S.W.2d 286 (Tex. App. – Fort Worth 1986, no writ). The court in Moore stated: “A guardian that is subject to a baseless and ill-founded removal action brought on behalf of the ward . . . should not be required to bear its own expenses in defending such a vexatious action.” Id. at 287.

4) The personal representative is not entitled to attorney’s fees in the prosecution of his own claim against the estate. Oldman v. Keaton, 597 S.W.2d 938 (Tex. Civ. App. – Texarkana 1980, writ ref’d n.r.e).

5) The personal representative may not recover attorney’s fees for unfounded and unnecessary litigation instituted by him. Neblett v. Butler, 162 S.W.2d 458 (Tex. Civ. App. – Galveston 1942, writ ref’d w.o.m. Compare Henderson v. Viesca, 922 S.W.2d 553 (Tex.App. – San Antonio, 1996, writ denied).

F. Reasonable Attorney’s Fees Are a Jury Issue

Estates Code §1055.052 provides that on contested issues of fact, a jury may be demanded, and this section includes the issue of reasonable attorney’s fees when such are contested. Griffin v. Barr, 587 S.W.2d 477 (Tex. Civ. App. – Dallas 1979, no writ). However, where, in answers to interrogatories, a party fails to designate an expert regarding “reasonable and necessary attorney’s fees,” the expert is precluded from testifying. E. F. Hutton v. Youngblood, 741 S.W.2d 363 (Tex. 1987).

G. Attorney ad Litem

Attorney’s fees for a court-appointed attorney ad litem are specifically provided for in EC §§1054.007 & 1204.002. Both sections provide for reasonable compensation, which is left to the sound discretion of the court, and such fees are taxed as costs.

The 2013 legislature made a significant change regarding when ad litems can be paid. Under TPC §669, ad litems’ fees were taxed as costs which “shall be paid out of the guardianship estate.” Hence, payment could be ordered only after a final order creating a guardianship is entered. Recognizing that it asks a lot of an ad litem to work without pay until a case concludes, the 2013 legislature changed EC §1155.151(b) to provide that all court appointees

(including ad litems) “shall be paid . . . at any time after the commencement of the proceeding as ordered by the court.”

Yet this change raises a practical difficulty: who does the court order to write the check? In a county-pay case, the answer is straightforward enough. But in a case where the fees will come from a ward’s estate, and there is no guardian to access those funds, who writes the check? The possibly incapacitated person? The applicant, whom the court has required to provide security for the probable costs of the proceeding under EC §1053.052? And if the courts begin to routinely require substantial cost deposits, might that discourage some applicants from stepping up and seeking a guardianship for an incapacitated loved one in the first place? One practical solution might be for a court to appoint a temporary guardian pending contest with the power to pay costs from the proposed ward’s estate, in appropriate cases.

Although the court has discretion, an award of attorney’s fees must be supported by competent evidence; a court “does not have authority to adjudicate the reasonableness of attorney’s fees on judicial knowledge without the benefit of evidence.” Brown & Root U.S.A., Inc. v. Trevino, 802 S.W.2d 13, 14-15 (Tex. App. – El Paso 1990, no writ). Brown v. Root is an excellent example of a case of a trial court abusing its discretion in awarding fees based solely on an attorney’s representation of the time he spent without providing supporting time records, much less testimony that his hourly rate was a “reasonable” rate or that the time expended was “necessary” for litigating the matter.

An attorney ad litem may receive compensation for guardianship-related expenses, but defending the court’s appointment of the attorney ad litem at appellate proceedings is in the attorney’s self-interest, and should not be compensated under EC §1155.151. In re Guardianship of Glasser, No. 04-07-00559-CV, 2009 WL 763351 (Tex. App. – San Antonio 2009, no pet.) (construing TPC §665A).

H. Guardian ad Litem

Similar to an award of fees to an attorney ad litem, an award of fees for a guardian ad litem must be supported by competent evidence. See Samco Properties, Inc. v. Cheatham, 977 S.W.2d 469 (Tex. App. – Houston [14th Dist.] 1998, pet. denied) (finding abuse of discretion to award $100,000 in guardian ad litem fees based on the proof provided); see also Celanese Chem. Co., Inc. v. Burleson, 821 S.W.2d 257 (Tex. App. – Houston [1st Dist.] 1991, no writ) (holding that despite the agreement by the ad litem and the attorney for the ward’s father that the amount sought was reasonable, the trial court was bound to apply the same factors used to determine the


5

reasonableness of attorney fees as in other cases).1 Fees for guardians ad litem are further constrained because a guardian ad litem is not entitled to compensation for work that exceeds proper responsibilities. Samara v. Samara, 52 S.W.3d 455 (Tex. App. – Houston [1st Dist.] 2001, pet. denied).

A good guide for attorneys of what not to do and for courts of what not to approve regarding fees for guardians ad litem is the Goodyear Dunlop Tires N.A. v. Gamez, 151 S.W.3d 574 (Tex. App. – San Antonio 2004, no pet.) case.2 As the court in Gamez noted, a guardian ad litem assumes the dual responsibility of acting as an officer of the court and protecting the interest of the person he was appointed to represent. The guardian ad litem is required to participate in the case to the extent necessary to adequately protect the interests of his ward, and the guardian ad litem’s role ends when the conflict leading to his appointment ends. Goodyear Dunlop Tires N.A. v. Gamez, 151 S.W.3d at 580-581.

These restrictions on a guardian ad litem’s role lead to three restrictions on a guardian ad litem’s fees:

1) “If [a guardian] ad litem engages in work

more appropriate for the plaintiff’s attorney and beyond the scope of the ad litem’s role, such work is non-compensable.” Id. at 583; accord Youngstown Area Jewish Federation v. Dunleavy, 223 S.W.3d 604 (Tex. App. – Dallas 2007, pet. denied) (concluding that the work performed by the ad litem such as reviewing state law on his own, reviewing case law provided by the plaintiff’s attorney, obtaining medical records, and contacting persons not associated with the case was not reasonable and necessary to protect the minor’s best interest). In Gamez, the appellate court rejected the idea that

1Those factors include “the difficulty and complexity of the case, the amount of time spent by the attorney, the benefit derived by the client, and the skill and experience reasonably needed to perform.” 2 In Gamez, the trial court appointed six guardians ad litem to protect the interests of numerous minors in a products liability suit against Goodyear. Five of the guardians ad litem were appointed only six weeks before final settlement of the lawsuit. The trial court awarded each of those five ad litems fees for 160 to 222 total hours. The appellate court noted: “In amassing the 160 to 222 hours, the ad litems engaged in activities outside the scope of their appointment, billed for other attorneys not approved by the trial court, billed for multiple attorneys to attend hearings, billed for attending and summarizing irrelevant depositions, billed between 0.10 and 4.00 hours to review each deposition notice, and even billed time for sleeping.” 151 S.W.3d at 591.

guardians ad litem could receive fees for reviewing all litigation-related documents, even those that did not relate to their own clients, or for attending depositions that did not relate to their own clients. The court stated that “[w]hen in doubt, time and circumstance permitting, a guardian ad litem should request guidance from the trial court in advance before engaging in the particular activity in question.” Id. at 584.

2) As a general rule, a guardian ad litem cannot be compensated for time expended by other attorneys. Id. at 588. As the appellate court in Gamez noted, “[w]hen a guardian ad litem is appointed, the trial court intends that appointed attorney to personally protect the minor’s interests and to act as an officer of the court. Id. (emphasis added). “Accordingly, it is generally not anticipated or reasonable for a guardian ad litem to delegate his ad litem responsibilities to other attorneys. . . . We hold that a guardian ad litem may not be compensated for time expended by other attorneys, unless the trial court has made a specific finding that the other attorney’s services were reasonable and necessary under a particular extenuating circumstance.” Id.

3) Guardians ad litem also cannot be compensated for work performed after the conflict for which they were appointed has been resolved. Id. at 580. For example, guardians ad litems are not entitled . . . to earn fees for post-conflict services in pursuit of their own interests, such as drafting their fee statements, preparing for the fee hearing and their time defending their fees at the hearing.” Id. at 587.

Additional restrictions exist concerning recovery of fees. For example, a guardian ad litem may not be awarded a percentage of the recovery as fees unless the order appointing the ad litem stated that the ad litem’s fees were contingent upon success. Tex-Pack Express, L.P. v. Martin, 80 S.W.3d 666, 668 (Tex. App. – Tyler 2002, no pet.). Moreover, a guardian ad litem may not recover fees for future services to be performed after the conflict of interest that required appointment of a guardian ad litem was resolved. Rio Grande Valley Gas Co. v. Lopez, 907 S.W.2d 622, 625 (Tex. App. – Corpus Christi 1995, no writ). However, ad litems are entitled to be paid even if no guardianship is established or no changes to the guardianship are made.


6

I. Ad Litem Fees Paid by County Under EC §1155.151, the county is responsible

for costs of a guardianship proceeding if the ward’s estate is insufficient to cover the costs. Fees of guardians ad litem and attorneys ad litem are included in costs of the proceeding.


7

APPENDIX 1: TRAVIS COUNTY’S ATTORNEY FEE STANDARDS

Standards for Court Approval of Attorney Fee Applications The Probate Court has formulated the following standards to assist attorneys with drafting fee applications in typical probate and guardianship cases. By understanding how the Court evaluates fee applications, attorneys will be better able to comply with Court standards, reducing the need for consultations between attorneys and Court personnel regarding problems with specific applications. These standards are not absolute rules; the Court will make exceptions in particular circumstances as fairness and justice demand. In formulating and revising these standards, the Court has considered not only the Texas Estates Code, the Texas Rules of Disciplinary Procedure, and applicable case law, but also comments from the Judicial Liaison Subcommittee of the Austin Bar Association’s Probate and Estate Planning Section. The Court appreciates opportunities like this one to work closely with the Bar to further the administration of justice in Travis County. I. ATTORNEY’S FEES It is the Court’s duty to ensure that estates of decedents and wards pay only for “reasonable and necessary” attorney’s fees and expenses. See Estates Code § 352.051 (decedent’s estates) and § 1155.102 (guardianship estates). The factors to be considered in determining the reasonableness of attorney’s fees are set forth in Rule 1.04 of the Texas Rules of Professional Conduct. These include the time and labor involved in the case, the difficulty or novelty of the work performed, the customary hourly rate of the attorney requesting the approval of fees, and the customary hourly rates of attorneys with similar education and skills performing similar services. A. Court-Approved Fees for a Fiduciary’s Attorney

The table below sets forth what the Court believes are appropriate rates for court-approved fiduciaries’ attorney’s fees for work performed on or after November 1, 2010. Attorneys should be aware, however, that the Court may depart from these rates in certain circumstances. For example, a particularly difficult probate or guardianship matter may require special expertise that should be compensated at an hourly rate higher than the attorney’s standard hourly rate under the Court’s guidelines. Similarly, the Court will adjust an attorney’s hourly rate downward in situations in which the estate is so small that the requested fee would consume most of the estate. Moreover, the Court will reduce an attorney’s fee when the time the attorney expends on a particular matter far exceeds the amount normally expended by attorneys on similar matters or, in those rare instances, when it comes to the Court’s attention that a lawyer is not performing up to the standards of those licensed for an equivalent length of time. Be advised that it is a particular lawyer’s experience in probate and guardianship law that determines his or her hourly rate, not the number of years the lawyer has been licensed. To assist the Court in determining a particular lawyer’s hourly rate, each attorney who is new to the practice of probate or guardianship law before the Court should submit his or her resume with that lawyer’s first fee application. Similarly, an attorney who believes that his or her experience before the Court qualifies for a rate increase should submit a letter to the Court detailing the reasons that such an increase is appropriate.

Years Practicing Probate and Guardianship Law Court-Approved Rate 0 – 2 years up to $165/hour 3 – 5 years $165 – 195/hour 6 – 10 years $195 – 250/hour 11+ years $250 – 350/hour

In determining how lawyers will be paid within the practice categories above, the Court will consider the extent of the lawyer’s experience in the area of law involved as well as Board Certification in


8

Probate and Estate Planning. In the 11+ category, the Court will pay the highest rate to those few lawyers whose experience and mastery of probate, estate planning, and guardianship law qualify them as experts in these areas.

B. Attorney Ad Litem and Guardian Ad Litem Fees

Formulating standards for the compensation of reasonable attorney’s fees for an attorney ad litem or guardian ad litem is challenging not only because of the variety of factors set forth in Rule 1.04 of the Texas Rules of Professional Conduct, but also because of certain factors over which the Court has limited control. In the case of court-appointed counsel for indigent parties, for example, the Court must heed Travis County budgetary considerations. Since an estate is unavailable or unable to pay fees, the Court approves fees under a budget approved and overseen by the Commissioners Court. Thus, attorneys who accept Court appointments in probate and guardianship cases with an indigent party should not expect to be reimbursed at their regular hourly rates because the Court’s annual budget limits the amounts it can pay for such services. Ordinarily, the Court compensates attorneys ad litem involved in County-pay cases at an hourly rate of $85 - $110 depending on the experience of the ad litem and the complexity of the case. The hourly rate for guardians ad litem in indigent cases is similar to that paid to attorneys ad litem, although it is common for the total fees to be higher for guardians ad litem, especially when the guardian ad litem initiates the Court proceedings. When an ad litem can be compensated from a solvent estate, the Court’s award of reasonable attorney’s fees usually begins with the Court determining if the representation provided by – and reasonably required of – the ad litem is “typical” or “normal.” In a “typical” or “normal” case, the Court ordinarily awards total fees of $450 to an attorney ad litem. In determining whether representation is “typical” or “normal,” the Court considers matters such as the type of case, the complexity or potential complexity of the case in terms of the number of parties and issues involved, and any unusual circumstances. These factors determine the extent to which the fee allowed should be more than, equal to, or less than the typical fee. In general, attorneys ad litem and guardians ad litem should expect to receive a fee that is less than the fee of the applicant’s attorney unless special factors are present.

C. Fees when an Attorney is also the Fiduciary In those rare situations in which the Court appoints an attorney as a fiduciary in a guardianship or administration, the attorney normally must elect either to seek payment calculated on the statutory probate or guardianship commission formula or to obtain reimbursement for attorney’s fees. If the guardianship or administration is particularly complex, the Court may approve dual compensation upon request of the attorney, preferably at the time of appointment. Dual compensation would include payment at the appropriate hourly rate for legal work done in the case and a separate commission for work done as a personal representative or as a guardian under § 352.002 or § 1155.001-1155.008 of the Estates Code, respectively. To be entitled to dual compensation, the attorney fiduciary must adhere to the following guidelines: 1. There must be full disclosure of the attorney-fiduciary’s request for dual compensation at the time

of appointment or upon motion and hearing if the request for dual compensation is made later. If the request is after the time of appointment, notice of the motion and hearing shall be given to all interested parties who have made an appearance in the case.

2. The attorney-fiduciary must keep meticulous time and expense records, carefully segregating legal and non-legal work.

3. Under Texas law, an attorney-fiduciary must seek only fiduciary compensation for guardian/personal representative services and may seek attorney’s fees for legal services only. Applications for attorney’s fees should give a detailed account of the legal services the attorney-


9

fiduciary rendered to the probate or guardianship estate. Attorney-fiduciaries will not be paid attorney’s fees for fiduciary services. For example, they will not be paid an attorney-fee rate for obtaining a bond, gathering estate assets, or making health care decisions for a ward of the Court. Should the attorney believe the statutory compensation formula as applied to a particular estate or guardianship is unreasonably low (see EC §§ 352.003 and 1155.006), then he or she should submit, with the annual or final account, contemporaneous time records of the fiduciary services for which additional hourly compensation is requested above the statutory fee. Note that the hourly fee approved by the Court for attorney fiduciary services (between $25-60 per hour, depending on the complexity) is significantly less than the Court-approved legal rates for attorneys.

D. Fees When Guadianship Case Filed in Bad Faith or Without Just Cause

Effective January 1, 2014, Estates Code Sec. 1155.054(d) provides: “If the court finds that a party in a guardianship proceeding acted in bad faith or without just cause in prosecuting or objecting to an application in the proceeding, the court may require the party to reimburse the ward’s estate for all or part of the attorney’s fees awarded under this section and shall issue judgment against the party and in favor of the estate for the amount of attorney’s fees required to be reimbursed to the estate.” The Court suggests that all counsel mention this wholly new statute in every initial interview with a potential guardianship applicant or other party. Bad faith henceforth can be penalized, and the time to recognize that is before a bad faith application or objection gets filed.

II. PARALEGAL/LEGAL ASSISTANT CHARGES

The Court recognizes that many attorneys rely on paralegals and legal assistants for gathering information and reviewing and preparing documents. The Court will approve reimbursement for reasonable and necessary “specifically delegated substantive legal work”1 that is done by a paralegal. Because “substantive legal work” does not include clerical or administrative work, this court will not allow recovery of paralegal time for such non-substantive, secretarial services even if such services are performed by paralegals or legal assistants (or attorneys). See, e.g., Gill Sav. Ass’n v. Int’l Supply Co., Inc., 759 S.W.2d 697, 705 (Tex. App. Dallas 1988, writ denied). Secretarial services are included in the attorney’s overhead, for which an attorney is reimbursed as part of his or her hourly rate. The Court will reimburse an attorney for paralegal/legal assistant work at a rate between $50 and $95 depending upon the following factors:

• certification as a paralegal by the NALA, or recognition as a PACE-Registered Paralegal, or successful completion of a legal assistant program, or possession of a post-secondary degree (B.A. degree or higher);

• number of years experience in the probate, estate planning, and guardianship field; • Texas Board of Legal Specialization certification in Estate Planning and Probate Law; and • number of continuing legal education courses in probate, guardianship, and estate planning attended in

the past three years. A legal assistant certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization is eligible for a $25 per hour increase above the hourly rate the Court would otherwise approve. In appropriate circumstances, a paralegal/legal assistant with special qualifications, such as a masters degree in accounting or a law-related field, may also be eligible for a $25 per hour increase. Further, if particular litigation requires special expertise that a paralegal/legal assistant is qualified to perform and has performed in the past, the Court

1 In 2005, the State Bar of Texas Board of Directors and the Paralegal Division of the State Bar of Texas defined a paralegal as a person whose work involves “the performance, under the ultimate direction and supervision of a licensed attorney, of specifically delegated substantive legal work, which work, for the most part, requires a sufficient knowledge of legal principles and procedures that, absent such a person, an attorney would be required to perform the task.” http://www.texasbar.com/Content/NavigationMenu/ForLawyers/Committees/Paralegal_Committee.htm (emphasis added).

http://www.texasbar.com/Content/NavigationMenu/ForLawyers/Committees/Paralegal_Committee.htm


10

might approve up to a $25 per hour increase above the court’s standard rate, but only if a request in writing is made to the Court before work is done. To better evaluate these factors in determining the appropriate rate for each paralegal/legal assistant, the Court requests that attorneys submit to the Court the resumes of each paralegal/legal assistant for whose work they will seek reimbursement from the Court and a short statement of any relevant qualifications that do not appear on the resume. The Court will maintain these resumes and information sheets. If an attorney believes that the billing rate for a paralegal or legal assistant should increase because of newly acquired credentials, the attorney should submit a letter to the Court detailing the reasons that such an increase is appropriate. III. BILLING A. Minimum Billing Increments

We ask attorneys to bill in .1 hour increments. The Court doesn’t permit .25 hours as a minimum billing increment because many tasks (opening and reviewing a bill, sending a short email, etc.) take only a few minutes. It overreaches to always claim 15 minutes for anything you do. The Court can’t find that .25 hours is universally reasonable and necessary when the task may have taken considerably less time.

B. No Block Billing

If the application lists a series of legal services as one entry, and the Court can’t tell how long each service took, the attorney will be required to file an amended application with this information.

C. Timing of Application

The Court understands that the cash-flow situations at law firms differ, leading some firms to bill more frequently than others. In general, the Court does not want to direct the timing of fee applications other than to suggest its preference that bills be submitted at least once a year. But do note that the Court will not approve fees that are beyond the statute of limitations for collecting those fees.

D. Content of Fee Application

To ease its review of fee applications, the Court asks attorneys to include the following in all of their fee requests:

• The title (or subtitle) of both the application and the proposed order should indicate the time period covered by the bill. For example, “Order Approving Attorney Fees, March 1, 2013 to March 31, 2013.”

• Clearly identify all of the following for each billed service: 1. The date the service was rendered. 2. The attorney or the paralegal/legal assistant performing the service. Do not use initials

unless the application identifies which initials correspond to which individuals. 3. A sufficiently detailed description of the service. 4. The time involved. 5. The the amount billed for that service.

• Somewhere in the application, indicate the hourly rate for each attorney or paralegal/legal assistant whose services are being billed.

E. Proposed Orders

• Proposed orders must include blanks where the amounts to be awarded will go. The Court is going to think about what is reasonable and necessary. It will not approve a pre-printed amount and will ask you to re-submit a proposed order with blanks.

• As noted above, indicate the time period covered by the bill in the title (or subtitle) of the proposed order.


11

IV. GUIDELINES FOR SPECIFIC TYPES OF CHARGES A. Travel

In determining how to reimburse attorneys for travel time, the Court follows two general rules. First, travel time from an attorney’s office to the courthouse to attend hearings is normally reimbursed at the attorney’s approved rate. If, however, the attorney resides or has an office outside the Central Texas area, the attorney’s travel time to the courthouse from his home or office will be reimbursed at half of the attorney’s approved rate. That attorney will also be entitled to mileage reimbursement at the I.R.S. rate. Second, the Court expects that most clients will ordinarily visit their attorney’s offices for consultations and document execution. Therefore, the Court will reimburse attorney travel-time to visit clients only (1) if that client is a ward and the attorney is the Court-appointed guardian, guardian ad litem, or attorney ad litem or (2) if some emergency or other special circumstance requires the attorney to visit the client at home. Such special circumstances should be described in the fee application to be reviewed by the Court. If the Court approves the visit, the Court will reimburse attorneys at their full, approved rate or at the appropriate County-pay rate in indigence cases.

B. Legal Research

The Court expects attorneys who practice in this Court to be familiar with general probate and guardianship matters; therefore, the Court will not reimburse attorneys for basic legal research in these areas. Thus, for example, the Court will not reimburse an attorney for research into the application requirements for the probate of a will as muniment of title, an independent or dependent administration, a determination of heirship, or a guardianship. However, the Court will reimburse attorneys for costs associated with necessary and reasonable legal research conducted to address novel legal questions or to respond to legal issues posed by the Court or opposing counsel. The Court considers the contract costs of computerized legal research (such as Westlaw and Lexis) to be part of an attorney’s overhead, as are the costs of a hard-copy library. Consequently, the Court does not reimburse for those costs.

C. Preparation of Fee Applications

It is the general practice of attorneys to include in their overhead the cost of generating and reviewing billing invoices and of drafting and mailing the cover letters that accompany the invoices. Even though the Court is cognizant that Court authority must be obtained for the approval of fee applications in certain circumstances, the Court believes that the estate of a decedent or ward should not be taxed with the attorney’s billing costs. Therefore, this Court, like the majority of statutory probate courts in the state, will not reimburse attorneys for the costs of preparing invoices and the fairly standardized fee applications and orders that accompany them.

D. Conversations with Court and Clerk Staff

The Court’s staff is a vital source of information and assistance to the legal community. The Court is proud of its accessibility to the lawyers and the public that have questions about uncontested matters – procedural and substantive – in probate and guardianship law. The Court and its staff attempt to answer these questions and to provide guidance where appropriate. Bearing in mind that the Court requires all personal representatives to have counsel, the Court does not believe it appropriate for the Court to have discussions with personal representatives outside the presence of their counsel. Please do not suggest to a client that it is appropriate to call the Court for a consultation or an explanation of what is going on in the estate being administered by that client. Again, the Court and its staff have no problem discussing these matters with an attorney. However, we do not think it is appropriate to charge an estate for the time the Court spent providing the personal representative’s attorney with assistance. Nor will the Court reimburse attorneys for time


12

spent in discussions with the Court Auditor aimed at correcting deficiencies in the client’s accountings. Of course, if a member of the Court staff requests an attorney to provide information not ordinarily contained in properly drafted pleadings, the Court will reimburse the attorney for the time spent responding to that request. Or, if the fee application reveals special circumstances requiring the attorney to seek guidance from the Court, the Court will award attorney’s fees. For example, the Court will reimburse attorneys for communications with the Court regarding the need for corrective action when a guardian, administrator, or an attorney dies during an ongoing estate. It continues to be the long-standing practice of this Court not to reimburse attorneys from probate and guardianship estates for calls to the Clerk’s office. While the Court understands that a problem arising in the Clerk’s office may frustrate an attorney, the Court does not believe that an estate should be required to pay for the attorney’s time spent redressing such a problem. The Court urges attorneys to communicate concerns directly to the Clerk’s office so that systemic improvements can be made to prevent the recurrence of any such problems. Moreover, the Court urges adherence to the common practice of attaching to all applications a copy of the proposed order and a self-addressed, stamped envelope. This step, coupled with payment of the correct filing and posting fee, if required, will help ensure that attorneys receive conformed copies of all proposed orders and will reduce the necessity for calls to the Clerk’s office to check on the status of a particular order.2 Alternatively, the attorney can check Probate Court records on the Clerk’s website (http://tccweb.co.travis.tx.us/) using the case name or cause number, and can review and print copies of all scanned pleadings and orders.

E. Copies and Faxes

From its experience reviewing fee applications and from consultation with commercial copying companies, the Court recognizes that attorneys pass through different costs to their clients and that significant variation exists in the price charged for copies, ranging from attorneys who include copies as overhead reimbursed as part of their hourly rate to those charging $.30 per page. Cognizant of the need for uniformity in reimbursements for copy costs and mindful of the rates for commercial copying in Travis County, the Court has determined that it will reimburse attorneys up to $.15 per page. Copies made by the Clerk’s office will be reimbursed at the rate charged by the Clerk if the fee application indicates this fact. In no case, however, will the Court pay any copying costs not accompanied by a statement of the charge per page and the number of copies. Fax charges have presented a unique problem for the Court. Some attorneys charge for faxes, others do not. Of those that do charge, some attorneys charge a set fee based on the fact that a fax was sent, others charge on a per-page basis for faxes sent. Some attorneys charge a set fee based on the fact that a fax was received, others charge on a per-page basis for faxes received. Some attorneys charge only for long distance faxes, others charge for both long distance and local faxes. Commercial entities that fax documents set their fees based on external market factors and a profit motive not usually associated with the recovery of expenses in the practice of law. Faced with these myriad and frustrating variations in pricing, the Court has determined that the best practice is to consider faxes as a part of attorney overhead and to include it as part of an attorney’s hourly rate. Therefore, the Court will not pay for fax transmissions. It will, however, pay long-distance charges associated with long-distance

2 Often, the Court receives calls from an attorney’s office wondering if it has signed a particular order. Many times these calls concern orders that have a time requirement regulating when the Court can address them. It is a waste of both the attorney’s and the Court’s resources to have an attorney call the Court for the status of orders for which a statutorily mandated time requirement has not run. Be assured, the Court makes every attempt to promptly sign orders when they are ripe for review. At least once or twice a day, the Court sends the signed orders and related pleadings to the Clerk’s offices for filing. The Court knows that attorneys can have difficulties getting copies of some orders and that they are often told that the orders are “with the Court.” However, it is not the practice of the Court to keep signed orders or to ignore pleadings needing court action. Far, far, more often than not, a signed order is in the Clerk’s office despite a deputy’s protestations to the contrary. The Court has no control over this problem. The Court can only sign orders and deliver them to the official record keeper. If an attorney has problems obtaining copies of orders, the Court suggests that the attorney deal with the appropriate authority at the Clerk’s office.

http://tccweb.co.travis.tx.us/


13

faxes in the same manner it reimburses long-distance phone calls (for which it will pay the actual long distance charges).

V. COSTS NECESSITATED BY MISFEASANCE OR MALFEASANCE The Court does not believe that guardianship or probate estates should be charged with any attorney time or mileage for resolving problems or attending hearings necessitated by the misfeasance or the malfeasance of the client or attorney. For instance, if a personal representative sells property without Court approval and there are attendant costs associated with rectifying the situation, the Court believes the personal representative should be personally responsible for any added expense. Likewise, show-cause hearings fall within this exception, and the attorney or the client will be responsible for all costs associated with attendance at the hearing, including service and filing fees assessed by the Clerk. VI. COURT ACTION ON FEE APPLICATIONS The Court holds all attorney-fee applications for 10 days to give other parties an opportunity to file objections to those applications. If no objections are filed, the Court will consider the applications on submission and without a hearing, unless the amount of fees requested is significant or the Court has questions about the propriety or reasonableness of the fees. In such cases, the Court will request that the application be set for a hearing. Fee requests should be filed as applications for payment of fees or for reimbursement of fees (if already paid by the representative) and not as claims against the estate. The Court has found that a representative is likely to rubber stamp his or her attorney’s fee request without exercising independent judgment, resulting in an inherent unfairness to the estate. If the representative chooses to disregard the Court’s policy and file the fee application as a claim, the Court will – in every case – require a hearing under Estates Code § 355.056 and § 1157.056.


15

APPENDIX 2: BLOCK BILLING – CANNOT ALWAYS TELL HOW MUCH TIME

SPENT ON WHAT TASKS


17

APPENDIX 3: REDACTIONS GONE WILD This is one page of an actual fee request that was submitted to the Court.


19

APPENDIX 4: A HELPFUL BILLING STATEMENT

With this billing statement, the Court can evaluate what time was spent on what tasks, and thus can evaluate

what was reasonable and necessary.


21

APPENDIX 5: A HELPFUL BILLING STATEMENT FROM A LAWYER PR

Note that guardian work is accounted for, but not billed. This is the second page of an invoice where only one

attorney is billing (at $250/hr), and the attorney is also the administrator.

attorney’s fees - texasbarcle · an attorney for an unsuccessful applicant where a guardianship...

Documents