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Professional Fee and Expense Guidelines - Document Text

PROFESSIONAL FEE AND EXPENSE GUIDELINES
IN BANKRUPTCY CASES PENDING BEFORE
THE HONORABLE JANICE MILLER KARLIN,
UNITED STATES BANKRUPTCY JUDGE
(Modified, effective January 7, 2010)


The Court has adopted, and continues to adhere to, Judge Nugent’s Professional Fee &
Expense Guidelines dated January 31, 2002 to the extent it does not conflict with the guidelines
that are meant specifically for Chapter 13 cases, enunciated below. Judge Nugent’s Policy can
be found on the Judges’ Corner on the Bankruptcy Court’s web site.

PROFESSIONAL FEE AND EXPENSE GUIDELINES
IN CHAPTER 13 BANKRUPTCY CASES PENDING BEFORE
THE HONORABLE JANICE MILLER KARLIN,
UNITED STATES BANKRUPTCY JUDGE


On February 21, 2007, this Court issued an opinion dealing with the issue of
presumptively fair attorney fees for Chapter 13 cases filed post-BAPCPA. Since that time, the
Court is aware that certain “end of the case” work has to be done in every case, which work was
not contemplated when it set the presumptively reasonable fees in In re Beck.1 In addition, the
Court believes that because of a reasonable increase in the hourly rates of many, if not most,
attorneys who appear before it, some of the fees deemed presumptively reasonable in 2007
should now be revised to reflect that increase. Finally, since the Beck decision, the Court has
implemented a standing order regarding conduit mortgage payments (09-2). It has become clear
that placing a Debtor into a “conduit” plan requires additional work by Debtor’s counsel, if for
no other reason than counsel must explain this process to each debtor client, and then acquire the
extensive information, and then furnish the information, required by Exhibits A and B to the
conduit rule.

The Court also believes that there should be some reduction in the number of hours now
necessary to complete some of the more routine tasks associated with a Chapter 13 filing due to
counsel’s growing familiarity with BAPCPA and its requirements. At the time In re Beck was
decided, BAPCPA was less than two years old, and many now settled issues were being
litigated. BAPCPA is now over four years old, and counsel should be more efficient in
performing what are now routine tasks, such as completing Form 22C, knowing what
information is required, and the like. The fees represented in these new guidelines also take this
factor into account.

Accordingly, although the Court will not restate its findings of facts and conclusions of
law from In re Beck, which continues to reflect the overall position of the Court, the Court
summarizes the main points, as follows, but will note where the numbers previously established

1In re Beck, Case No. 06-40774, and others.


in Beck have been revised upwards to reflect the above changes:

1.
The presumptively reasonable fee for filing an “average” Chapter 13 case for a
below-median income debtor is $2,800 $3,100, which includes the “end of the
case” work;2
2.
The presumptively reasonable fee for filing an “average” Chapter 13 case for an
above-median income debtor is $3,300$3,600, which also includes the “end of the
case” work;
3.
If a Motion to Extend the Automatic Stay (or create a stay) is filed, debtor’s
counsel is entitled to a presumptively reasonable additional amount of $400;3
4.
If the case will involve compliance with the Standing Order (or local rule, if it is
adopted as such) regarding conduit mortgage payments for a debtor who is
delinquent on his or her real property mortgage at the commencement of the case,
debtor’s counsel is entitled to a presumptive reasonable additional amount of
$200;
5.
This fee covers all services provide by debtor’s counsel and/or firm reasonably
required by the debtor to obtain a Chapter 13 discharge (or completion of the case
where debtor is not entitled to a discharge) from initial consultation through
dismissal or closing of the case;
6.
If the presumptively reasonable fee does not adequately compensate counsel for
work that counsel believes will be required before filing or pre-confirmation,
counsel is always welcome to seek a higher fee. In that case, if any party in
interest objects to the reasonableness of the fee requested in the Disclosure of
Compensation of Attorney for Debtor, B203, debtor’s counsel will be required to
justify the requested fee, and pursuant to 11 U.S.C § 330(a)(4)(B) and Fed. R.
2The Court understands the nature of the work a debtor’s counsel must now complete at the end of the case
(including a Motion for Entry of Discharge and Notice of Objection Deadline required with that Motion, as well as
the multi-page Certification of Debtors [regarding DSOs, the homestead exemption vis a vis §§ 522(a)(1) and (q)(1),
and regarding last discharge received]), which work was not emphasized by any witness testifying in the Beck, et al.
trials). For that reason, the Court did not consider the time required to complete that work, and did not allow any
specific amount for that additional work when setting these presumptively reasonable fees in March 2007. This
$300 difference reflects the additional attorney fees and/or professional time that will likely be expended towards the
end of Chapter 13 cases, which, if a case is earlier dismissed, may never be earned. Accordingly, the Court
understands that the Trustee will hold this additional $300 until and unless counsel actually performs the work
required. Including the fee up front will allow debtors to pay this fee over the life of the plan, instead of having to
come up with it in a lump sum at the end of the case.

3Because it is a best practice to file an affidavit or a declaration under penalty of perjury with such Motion,
the Court believes these Motions require more work than routine motions, and thus justify a higher presumptively
reasonable fee.

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Bankr. P. 2016(a), itemize all the services rendered (or expected to be rendered),
by whom, the date the work was performed (or is expected to be performed), a
specific, detailed description of the work done, and where not self-evident, the
purpose of the work, the time spent on each task in tenths of an hour, and the
dollar value of the work performed, as well as a recitation of the hourly rates of
those performing the work.

7.
Debtor’s counsel may elect, for legal services rendered on discrete issues, to add a
prayer for the specific additional legal fees and expenses that that specific post-
confirmation work requires. In the motion, or prayer, counsel needs to generally
summarize what work was done by whom and on what dates, sufficient so the
Court, the Trustee and creditors can determine the reasonableness of the requested
fee.4 This option is only permissible when debtor’s counsel states that the fees
already awarded in the case have been consumed by the legal services already
provided to debtor.
a.
The Court can take judicial notice that attorney and paraprofessional fees
of $150 $250 would typically be reasonable in filing and prosecuting most
affirmative motions set on negative noticing (e.g., Motions to Abate,
Motions to Incur Debt, Motions to Retain Post-Petition Tax Refund,
Motions to Modify Confirmed Plan) and/or paraprofessional time by the
time someone meets with or discusses the issue with the client, delegates
preparation or drafts and reviews the motion and proposed order, and then
communicates the results with the client. For that reason, if counsel seeks
$150 $250 or less, the Court will require little detail in the summary of
services rendered.
b.
Similarly, the Court can take judicial notice that most responses to
motions, which by definition will typically result in a hearing (e.g.,
Responses to Motions to Dismiss for default or lack of feasibility, Motions
to Compel, Motions for Relief from Stay) would likely result in $200 $300
in attorney and/or professional time, the additional amount to compensate
counsel for attending a hearing (unless counsel either resolves the matter
with the movant or uses the Trustee to seek a continuance or announce a
resolution). Again, for that reason, if counsel seeks $200 $300 or less in
fees, the Court will require little detail in the summary of services
rendered.
4For example, the Court used to receive motions, requesting upwards of $350 in fees or more, that stated as
the only basis for the fee that "I had to file this motion." When the motion is a three line Motion to Abate, which
motion is likely in the firm’s “form” base, and it only contains one additional sentence to distinguish it from the
many other similar motions filed (such as “client had to be off work for 8 weeks for maternity leave”), it is difficult
to see how filing that pleading could result in a $550 combined fee unless additional detail is provided.

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c.
The Court does not assume that it would require $550, however, to file
both an affirmative motion and a response to a motion if they are filed in
tandem, i.e. within a short period of time (e.g. a Motion to Abate filed
with a Response to Trustee’s Motion to Dismiss for default, or Motion for
Post- Confirmation Amendment of Plan filed with an objection to a
Motion for Relief from Stay). For that reason, additional detail will be
required if fees in excess of the presumptively reasonable $300 fees are
sought.
d.
The Court will also find it presumptively reasonable for counsel to seek
additional recovery for actual expenses incurred in duplicating and
mailing any required notices. If counsel seeks $1 for each person or entity
to whom a mailing is physically mailed as reimbursement of such
expenses in any motion or response, that amount will be deemed
presumptively reasonable under these guidelines.
8.
At any point during the pendency of the case, counsel is also welcome to file a
regular fee application, for example if the legal services rendered post-
confirmation exceed the presumptively reasonable amounts set forth above or
legal work in addition to that involved in a discrete motion has been performed.
For cases filed after February 21, 2007 (the date of the Beck decision), this option
is only permissible when the fees already awarded in the case have been
consumed by the legal services already provided to debtor.5 Accordingly, in
those cases, counsel will be required to indicate that the fees have been
consumed, and then demonstrate the reasonableness of the additional fees to the
trustee, creditors, and the Court, with time records maintained or re-created from
the outset of the representation, so that the reasonableness and necessity of the
additional services rendered can be properly analyzed. If a party in interest
challenges the fees, counsel may be required to demonstrate that the prior
awarded fee has, in fact, been consumed, by the provision of legal services.
9.
As noted above, the Court will not require the certification that prior fees have
been consumed for cases filed prior to February 21, 2007, the date of the decision
in Beck. This is both because the Court is aware that attorneys who previously
chose not to keep track of their time prior to this Court’s decision in Beck may not
be able to certify this fact, and because in many, if not most cases, the fees
5As noted in Beck, the Court is well aware that legal services are required post-petition in every case, such
as making sure the client completes and files the financial management course information, sending tax returns to the
trustee, receiving any electronic communications about the case from the trustee, the Clerk, or others, and notifying
the client when the case is complete—at a minimum. To avoid the necessity of filing a motion or fee application to
obtain fees for those basic services required in almost every case, the Court assumed a presumptively reasonable fee
of $450 for such services. Accordingly, when counsel is indicating that the fee has been consumed, the Court
understands this does not include the $450 cushion the Court purposely added in for such services.

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awarded from the outset of the case were significantly lower than this Court finds
was likely reasonable even pre-BAPCPA. Although the Court has stated that the
“certification” is not required for pre-February 21, 2007 cases, the Court expects
that attorneys will not seek additional fees for discrete motions unless they
believe that fees previously awarded have been consumed. This does not prevent
any party in interest, who has a good faith belief that any requested fee is
unreasonable, from filing an appropriate objection. In that instance, just like the
practice before the Beck decision, to receive the fee, counsel will need to
demonstrate entitlement to the fee requested, which may then require re-created
time records or contemporaneously kept records.

CONCLUSION

Although the Court has established “presumptively reasonable fees” in these guidelines,
the Court is also aware that for some attorneys, these fees are higher than the rates they currently
charge their clients. In that instance, the Court assumes counsel will not charge or seek
reimbursement for the fees set forth herein, but will charge at the rate agreed to by the debtor
client at the commencement of the case.

The Court recognizes that in the creation of these guidelines it may not have anticipated
every conceivable fee and expense concern that could be raised by counsel. Questions should be
directed either to the Court’s law clerk or to the Courtroom Deputies in the office of the Clerk of
the Court.

January 14, 2007 January 7, 2010

JANICE MILLER KARLIN,
Bankruptcy Judge, United States Bankruptcy
Court for the District of Kansas

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