• April 30, 2015

haircut-33187_640To answer the question in the headline, you’d probably want to know (1) what is the degree of certainty of that return, and (2) what is the period of time between the initial investment and the return?

I won’t do the number-crunching for you except to say that we’re talking about a 25% return, there, which looks pretty good if the turn-around is under six months. If you had an agreement with someone that they would give you $50,000, however, and they failed to, and you had an agreement that the debtor would pay your “reasonable attorneys’ fees” if you were forced to go to court to collect the $50,000, be forewarned: It is possible a court might rule that: “Expending nearly $41,000 to defend a $52,627 fee award is a disproportionate reaction to the dispute….” And you might end up being awarded a small fraction of the legal fees that you invested…(In the linked opinion, the claim for $41,000 in fees was knocked down to $5,000.)

Every once in a while, a court will award a lawyer everything that she asks for. But it seems far more common, at least in my obviously anecdotal experience, that lawyers (and their clients) need to expect a proverbial hair-cut when they seek to recover attorneys’ fees, whether recoverable under a statute or under the terms of a contract. (In the linked opinion, you’ll note that the “win” for which the victorious lawyers sought $41,000 in fees was actually a split decision rather than a complete win, by the way, which was part of the justification for the drastic reduction in awarded fees.)

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