As dealt with in an earlier short article on the shifting of the responsibility for a litigant’s attorney’s fees to the opposing party, that relief is available in Texas only in particular types of cases.  Recent appellate court opinions, based in part on a legislative mandate, have made fee-shifting potentially more difficult in some of those types of cases.  That potential difficulty is posed by the requirement to use what is called the “lodestar” method of proving the factual elements which support the determination of the amount of the fee which can be shifted to the opposition.  While a detailed analysis of the relevant opinions is beyond the scope and purpose of this article, certain aspects should be noted if a person’s claim fits within the ambit of the required “lodestar” proof, and one separate aspect – the choice made by the attorney concerning the method of proving his/her fees – may be problematic, or even fatal, to the recovery of attorneys fees in cases where “lodestar” proof is not required but is used as the method of proof.

First, the lodestar method has been used consistently in attorneys fee-shifting cases in federal courts for years.  Any attorney with a case in a federal court must be familiar with the requirements of that method if he/she expects to recover a client’s fees in federal court.  While the elements of the proof are the same in both state and feral courts, this article deals with the recent Texas state court opinions, where the method is not universally required.

Stated simply, the lodestar method of proving attorney’s fees requires a much more detailed factual explanation of the basis for the particular charges made by the lawyers doing the work on the case.  As a practical matter, the method requires attorneys to keep detailed time records.  The records must show the number of hours worked on particular tasks, a description of the nature of the tasks, the identity of the persons performing the tasks, when in the course of the case the tasks were performed, and the hourly rate charged by each person.  That means that such conclusory descriptions such as “Reviewed file to prepare for depositions” and such “block-billing” practices as ascribing 8.0 hours to a variety of tasks on a given day, will not be acceptable.  The specific time interval for each separate task must be recorded.

The above regimen obviously poses difficulties for attorneys who do not keep regular daily records of their tasks and the time intervals devoted to those tasks.  And, for those firms which do keep time records, the prohibition of block-billing will require more attention to detail in the descriptions of those tasks and the hours devoted to separate tasks.  A cautionary observation is appropriate here: even if a client is willing to accept general descriptions on a law firm’s billings – and would pay those bills without question because of the relation of trust the client has with the lawyer – that willingness does not justify the transfer of the liability for the attorney’s fees to the opposition.  A court or jury must have specific information if the lodestar method is used.

The two type of cases in Texas state courts which require the use of the lodestar methods are class actions (as mandated by the legislature) and employment cases arising under the Texas Commission on Human Rights Act.  So every class action and all discrimination and employment retaliation cases under TCHRA will necessarily involve lodestar in any proof of attorneys’ fees.[1]

The separate category of cases which will involve lodestar is every case which qualifies for the shifting of attorneys’ fees when the attorney seeking to recover attorneys’ fees chooses to use lodestar as the method of calculation.[2]

In the two Supreme Court cases cited in the footnote, the court reversed lower court’s grants of attorneys fees, saying that the evidence did not comply with the lodestar rule because the descriptions of the work were not sufficiently detailed.  The lesson from those cases is that if an attorney chooses to base his/her attorneys’ fees evidence on hours worked and rate charged, the offer invokes the lodestar rule, hence the evidence must be sufficiently detailed to consider whether the work done and the time it took to do it were reasonable.

Other Texas cases have held that in cases where the lodestar method does not apply, attorneys may testify about his/her expenses, the amount of fees charged and the reasonableness of the fees and that there is no need for documentary evidence (such as attorneys’ billings), and that such evidence will be sufficient to support an award of attorneys’ fees.[3]

Although the day may be coming when the lodestar rule applies to all fee-shifting claims in Texas state courts, presently the application is limited to the situations discussed above.  The prevalence of that rule in the Federal courts and the thoroughness of the analysis of the evidence in those courts suggests that the application of the rule in all state court cases where attorneys’ fees are sought may be in our future.  Until then, the layperson who may have a case in which attorneys’ fees are recoverable would do well to ensure that his/her attorney keeps adequate time records.  That requirement would, as well, ensure that there is a greater understanding by the client of the details of the work performed by the attorney.

No information in this article is intended to constitute legal advice.  For specific legal advice, please contact an attorney.

If you have any questions or would like more information about the subject of this article, please contact Joe Roady at 713.220.9153 or jroady@hirschwest.com.

[1] See Rocker v. Centex Corp., 337 S.W.3d 907, 922 (Tex.App.—Dallas 2012) citing § 26.003(a) of the Texas Civil Practice and Remedies Code; and E. Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 760 (Tex. 2012).

[2] See City of Laredo v. Montano, 414 S.W.3d 731, 736-37 (Tex. 2013); and Long v. Griffin, 2014 WL 1643271 *2-3 (Tex. 2014).

[3] See Metroplex Mailing Svcs. LLC v. RR Donnelley & Sons Co., 410 S.W.3d 889, 899-900 (Tex.App.—Dallas 2013); Concert Health Plan, Inc. v. Houston Northwest Ptnrs, Ltd., 2013 WL 2382960 at *9 n. 17, (Tex.App.-Houston [14th Dist.] 2013); Circle Ridge Prod., Inc. v. Kittrell Family Minerals, LLC, 2013 WL 3781367 at *7 (Tex.App.- Texarkana, 2013).