From PLI’s Course Handbook
Eighth Annual School Law Institute
#14126
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8
attorney fee awards in pro
bono cases: for the public good?
Philip D. Fraissinet
Kimberly L. Cunningham
Bracewell & Giuliani, LLP
PRACTICING LAW INSTITUTE
EIGHTH ANNUAL SCHOOL LAW INSTITUTE
MAY 19, 2008
NEW YORK CITY, NEW YORK
ATTORNEY FEE AWARDS IN PRO BONO CASES:
FOR THE PUBLIC GOOD?
By Philip D. Fraissinet and
Kimberly L. Cunningham
Bracewell & Giuliani, LLP
711 Louisiana Street, Suite 2300
Houston, Texas 77002
713-223-2300
Fax: 713-221-1212
Introduction
Pro bono work has historically given private law firms the opportunity to provide free legal assistance to those who would not otherwise be able to afford it. However, over the past several years courts have been awarding attorneys’ fees to successful litigants who are represented “pro bono” by private law firms. This has created much controversy over whether the cases are truly being handled on a pro bono basis. The controversy is even more acute when the case is being handled by a nonprofit legal organization whose viability is dependent upon such fee awards and/or when fees must be paid by a government entity defendant, such as a public school district, often at taxpayer expense. This paper will explore the ethical, legal, and practical considerations surrounding this often controversial issue.
I. Parents Involved in Public Schools v. Seattle School District No. 1
This controversy regarding attorney fee awards in pro bono cases has become extremely heated in the aftermath of the Supreme Court’s recent decision in Parents Involved in Public Schools (PICS) v. Seattle School District No.1.[1] In PICS, the Court determined that the Seattle Public School District’s method of using race as a tiebreaker in student assignment to over-subscribed schools was not narrowly tailored and was, therefore, unconstitutional.[2] During the preparation and litigation of this case, the plaintiff was represented by a large private law firm on a pro bono basis. Just months after the Supreme Court’s decision, the law firm filed a petition seeking $1.8 million in attorneys’ fees[3] pursuant to the Civil Rights Attorney’s Fees Award Act (“Section 1988”).[4]
In its brief opposing the private law firm’s entitlement to attorney fees, the Seattle School District questions whether large law firms representing clients on a pro bono basis are entitled to seek substantial legal fees from the defendant when they prevail.[5] The Assistant General Counsel of the Seattle Public Schools has argued that the firm is essentially seeking $1.8 million in attorney fees from taxpayers who fund the public school system.[6]
Proponents of the fee award argue that Section 1988 has been around for a long time to allow for legal fees in pro bono or public service cases, and that a defendant who has violated the law should not benefit merely because the case was undertaken on a pro bono basis.[7] Moreover, since most pro bono cases are handled by nonprofit legal aid organizations or by large law firms who typically donate their winnings to nonprofit legal aid organizations, many argue that the awards are necessary to ensure that the civil rights and the rights of indigent individuals are protected.
II. Legal Authority for Seeking Attorney Fees in Pro Bono Cases
Section 1988 is the federal law entitling the plaintiff in PICS to seek attorneys’ fees and is probably the most frequently cited authority for the recoupment of attorneys’ fees in pro bono and public service cases. Section 1988 was established to prevent attorneys from shying away from civil rights cases which they may not otherwise undertake.[8] Pursuant to Section 1988, the prevailing party in a civil rights action is entitled to reasonable attorney’s fees. A plaintiff need not win the entire case in order to seek attorneys’ fees. For purposes of Section 1988, a plaintiff prevails if he has succeeded on any significant issue in litigation which achieved some of the benefit the parties sought in bringing the suit.[9]
Section 1988 is not the only authority by which attorney fees are sought in pro bono matters. A number of federal statutes, including, but not limited to, the Fair Labor Standards Act (“FLSA”) and the Voting Rights Act of 1965 (“VRA”), permit prevailing plaintiffs to seek reasonable attorneys’ fees and costs, to be paid by the defendant.[10] Federal statutes allowing prevailing plaintiffs to recover reasonable attorneys’ fees do not carve out an exception for plaintiffs being represented on a pro bono basis. Accordingly, such statutes have served as the basis for attorney fee awards in pro bono cases.[11]
III. Ethical Issues Surrounding Attorney Fee Awards in Pro Bono Cases
The phrase “pro bono” is short for pro bono publico, which is Latin for "for the public good."[12] Pro bono is defined by Black’s Law Dictionary as “being or involving uncompensated legal services performed especially for the public good.”
Thus, although there is sufficient legal authority for seeking attorney fees in pro bono matters, when considering the traditional definition of pro bono, it is easy to understand why the ethical issues regarding attorneys’ fees in such cases are unclear. A review of the ethics policies and pro bono rules governing various legal organizations and bar associations sheds some light on the subject.
A. American Bar Association’s (“ABA”) Model Rule
According to the ABA’s Model Rule 6.1 on Voluntary Pro Bono Service, every lawyer has a professional responsibility to provide legal services to those unable to pay.[13] The ABA’s Model Rule encourages lawyers to devote at least fifty (50) hours of pro bono legal services, without expectation of fee, to persons of limited means or to charitable, religious, civic, community, governmental, and educational organizations devoted to the needs of persons with limited means.[14]
The ABA squarely addresses the issue of attorney fees in pro bono cases in the comments to Rule 6.1.[15] According to the ABA, whether work qualifies as pro bono turns on the lawyer’s intent at the time of undertaking the project. Because Rule 6.1 requires that service be provided without fee or expectation of fee, the intent of the lawyer to render free legal services is essential for the work performed to fall within the meaning of pro bono.[16] Therefore, the ABA has taken the position that an award of statutory lawyers’ fees in a case originally accepted as pro bono does not disqualify such services from qualifying as pro bono. However, services rendered cannot be considered pro bono if an anticipated fee is uncollected. Moreover, the ABA suggests, but does not require, lawyers who receive fees in pro bono cases to contribute “an appropriate portion” to organizations or projects that benefit persons of limited means.[17]
B. New York Bar Association and Pro Bono Regulations
1. New York State Bar Association
The New York Lawyer’s Code of Professional Responsibility (the “New York Lawyer’s Code” or the “Code”) outlines the standards of ethical conduct for lawyers in the State of New York.[18] According to the Code, a lawyer has a professional obligation to render public interest and pro bono legal service. The Code encourages lawyers in the State of New York to provide at least twenty (20) hours of pro bono services annually by rendering legal services at no fee and without expectation of fee to persons of limited financial means or public service organizations.[19]
Unlike the ABA’s Model Rule, the New York Lawyer’s Code does not address the question of attorney fee awards in pro bono cases. However, like the Model Rule, the ethical focus of the Code seems to turn on the attorney’s expectation at the time he agrees to provide his services.[20] With the widespread attention being given to laws allowing for attorney fees in pro bono cases, an attorney may find it more difficult than ever to take on a pro bono case without some minor expectation that attorneys’ fees will be recouped if he prevails.
2. The Association of the Bar of the City of New York
Beyond the principles for pro bono service outlined in the State of New York Lawyer’s Code of Professional Responsibility, the New York City Bar Association issued a Statement of Pro Bono Principles (“Pro Bono Principles”).[21] On November 30, 2005, thirty (30) of the fifty-five (55) large Manhatten law firms endorsed the Pro Bono Principles.[22]
The New York City Bar Association’s Pro Bono Principles recognize that pro bono service is an ethical obligation of all lawyers. All signatories to the Pro Bono Principles must commit to fifty (50) hours of pro bono service each year. Moreover, the Pro Bono Principles explicitly state:
In pro bono legal matters in which we recover or are awarded fees, we will donate the fees recovered (in excess of any disbursements incurred in connection with the matter) to a Legal Services Organization or other public service organization or will otherwise use the recovered fees to support pro bono legal activities.[23]
Even assuming “disbursements” means out of pocket costs, this commitment by signatories to the Pro Bono Principles goes one step further than the ABA’s Model Rule which encourages, but does not require, the donation of attorney fees in pro bono cases. The drafters of these Principles seem to take the position that fulfillment of a lawyer’s ethical obligations to provide pro bono services and the receipt of attorneys’ fees for such work cannot co-exist.
C. Texas Bar Association and Pro Bono Regulations
The Texas Bar Association has adopted two provisions that address pro bono legal services: the State Bar of Texas Resolution[24] (the “Resolution”) and Section 6 of the Preamble to the Texas Disciplinary Rules of Professional Conduct (“Section 6”).[25]
1. State Bar of Texas Resolution
Like the ABA Model Rule, the Resolution admonishes Texas attorneys to render at least fifty (50) hours of legal service to the poor each year or to make an equivalent contribution to an organization that provides direct legal services to the poor. Additionally, it outlines a number of actions that qualify as legal services to the poor, such as legal services to the poor without an expectation of compensation or at a substantially reduced rate.[26]
Unlike the ABA, the Texas Resolution does not squarely address the ethical issue of attorney fee awards in pro bono cases. However, it does consider reimbursement of fees in its definition of legal services to the poor. The Resolution clarifies that out-of-pocket, “non-reimbursed” expenses incurred by a lawyer handling a matter qualifies as legal services to the poor.[27] Use of the phrase “non-reimbursed” raises interesting ethical issues about the receipt of attorney fees in pro bono cases for Texas lawyers. For example, does it matter that the source of the reimbursement is the defendant and not the client? Must a lawyer donate such fees in order to avoid the perception that he has been reimbursed?
2. Preamble to the Texas Disciplinary Rules of Professional Conduct
The Preamble to the Texas Disciplinary rules of Professional Conduct, Section 6, indicates that Texas lawyers should provide free legal services to those unable to pay reasonable fees. According to Section 6, such service is a “moral obligation” of each lawyer as well as the legal profession generally. Like the Texas Resolution, Section 6 does not address the issue of attorney fee awards in pro bono cases.[28] However, based on the aforementioned standard, a lawyer who accepts a matter on a pro bono basis, and is later awarded fees to be paid by the defendant, has still rendered “free legal services to those unable to pay,” and, therefore, fulfilled his “moral obligation.”
D. The American Lawyer
Bar associations are not the only organizations in the legal community weighing in on this issue. The American Lawyer magazine has taken a very bright line position on attorney fees in pro bono cases. The American Lawyer has been a long-time publisher of law firm pro bono rankings. In fact, the American Lawyer publishes an annual survey of the pro bono statistics of the nation’s top 100 law firms. Recently, in its article entitled “Pro Bono 2007: Drawing the Line,” the American Lawyer acknowledged the ethical dilemma that arises when private law firms receive attorneys’ fees in pro bono matters.[29] Accordingly, it has requested that law firms commit to donating the fees awarded in pro bono cases to legal service organizations, charitable foundations, or into an earmarked firm account to cover pro bono expenses at the beginning of cases where such fees may possibly be awarded.[30]
Moreover, the American Lawyer is asking firms that refuse to make this commitment to refrain from reporting such hours as pro bono hours to the American Lawyer.[31] The magazine’s request may cause many law firms who look forward to the annual pro bono rankings as an opportunity to highlight their commitment to public service to rethink their position on the retention of attorney fees after prevailing in a pro bono matter.
IV. “Reasonable” Attorney Fees in Pro Bono Cases
Even when attorney fees are awarded in pro bono cases, Courts are stringent about determining what constitutes “reasonable attorney fees.” Court typically begin by using the “loadstar” method to ascertain what factors should be considered in the determination of reasonable attorney fees.[32] Then, they apply a list of factors outline to decide upon a “reasonable attorney rate” and a “reasonable” amount of hours worked. This can include consideration of the fact that an attorney originally agreed to handle the case on a pro bono basis.
As previously mentioned, many courts apply the “loadstar” method of calculation to ascertain the amount of fees to be awarded. This method of calculation involves determining the reasonable hourly rate for each attorney and the reasonable hours expended, and multiplying the two figures together to obtain the presumptively reasonable fee award.[33] Courts may also use their discretion to increase or reduce the amount based on the particular circumstances of the case.
In order to determine the reasonable hourly rate and/or the reasonable hours expended, numerous courts have considered the following factors:
1) attorney rates in the marketplace;
2) the degree of success obtained[34];
3) the complexity and difficulty of the case;
4) the available expertise and capacity of the client’s other counsel (if any);
5) the resources required to prosecute the case effectively (taking account the resources being marshaled by the other side but not endorsing scorched earth tactics);