DOJ Issues New Guidelines For Billing Legal Fees In Bankruptcy Cases
5:57 pm, June 11th, 2013
The U.S. Justice Department today issued new guidelines governing legal fees and costs for lawyers handling bankruptcy reorganization cases involving $50 million or more in assets and $50 million or more in liabilities.
The new rules appear aimed at preventing lawyers from padding their bills at the expense of the bankruptcy petitioners or their creditors.
They also are intended to promote greater transparency in public bankruptcy filings.
The new guidelines state that they are intended to insure that bankruptcy attorneys “are “subject to the same client-driven market forces, scrutiny, and accountability as professionals in non-bankruptcy engagements” and that all compensation for legal fees and costs “is reasonable and necessary, particularly as compared to the market measured both by the applicant’s own billing practices for bankruptcy and non-bankruptcy engagements and by those of other comparable professionals.”
The new guidelines say that bankruptcy trustees will ordinarily object to legal fees that are above the market rate for comparable services.