We have a new, multipage model Chapter 13 plan in several Bay Area divisions. It exalts mathematic precision over the intentions of the plan.
Have the wrong number for the fixed monthly payments to particular creditors, and the money is distributed, willy-nilly, to unsecured creditors. (There are other idiocies that I will surely complain to you about later. This one will do for today.)
Given the quality of the information we begin with, as bankruptcy lawyers, multiple modifications of plans are inevitable.
The young lawyer at the training session wanted to know how the system was going to compensate him for the added effort.
It’s going to be hard because he doesn’t keep time.
He doesn’t know how much time a case takes now, in contrast to what a case will take under the new regime.
Not good facts.
How bankruptcy lawyers are paid
In the decades I’ve been practicing consumer bankruptcy law, courts have broadly recognized a no-look fee. I think San Jose’s Judge Grube coined the phrase.
The no-look fee was the amount that he would approve for your work in a Chapter 13 without looking at your time records or other evidence of effort or accomplishment in a case.
Most practitioners in our division embraced the idea. Other courts adopted the approach.
It seems that most practitioners threw out their billing programs or their time slips and felt liberated.
Seductive, perhaps, but a bad move.
What time records do for you
Without time records, you are hostage to the sense of your judges as to how much time a case under BAPCPA takes.
Very few bankruptcy judges came from the consumer practice. They have no experience with the naivete, the disorganization, and the distraction that consumers display.
How are you going to either make the case for an adequate increase in the no look fee, or make an application for the time required for each modification if you have no time records?
“Well, Your Honor, it was a bunch of work”.
I don’t think that will be persuasive.
My sense is that the new San Francisco plan will increase the time required by 25%. Because I keep contemporaneous time records, I will know, on the small sample that my cases provide, what the increased time amounts to.
I will have evidence. And I will use it to be paid fairly.
I will be speaking on Getting Paid at the NACBA Fall Workshop later in October with Jed Berliner, of fee-only fame, and Maryland practitioner Brett Weiss. We expect to allow time for an open discussion of pricing cases and collecting fees. Join us in NOLA.
Image courtesy of Flickr and Thomas Hawk.
J. kaufman says
We have the no-look option here in Idaho. I think it is currently $3,000. NOT ENOUGH in my opinion. Our Trustee is very skeptical of debtors and getting a plan confirmed requires at least one continued confirmation hearing, sometimes multiple hearings and multiple plans. I could go on and on….
I charge per the hour for chapter 13s and regularly submit fee applications for work done to get a plan confirmed – these range, typically from $5,000 – $8,500. The difficult thing is not having my fee escalate to the point where the client can’t pay it through in the plan – and in those situations, I usually ask for approval of the entire fee, but ask that only a portion be paid through the plan (reserving the right to seek additional disbursement if the plan base increases).