Thursday, February 25, 2010


NYLJ 5-25-07


2. Just to show you that attorney’s exorbitant fees are not limited to just their clients, when given the opportunity they’ll even overcharge themselves.

Take Mr. Varick, Esq., and his action against the IRS. Pretty easy to root for him, sure—lesser of two evils, even if you have a grudge. However, when Justice Acreage gave him leave to seek financial redress for the cost of the action—mind you, not yet punitive damages—Varick the litigant pro se was presented with an invoice from Varick, Esq., for the whopping sum of $21,206.

The unusual ruling came out of the challenge from the IRS that all circuits had unanimously come down against awards to pro se litigants, but, as the US Court of Appeals 2nd had never expressly ruled against attorney’s acting on their own behalf, Judge Acreage decided it was time to give the IRS a taste of its own medicine. But even Acreage wasn’t ready for that big of a dose.

The justification of the justice was USC Section 7430(c)and 2412(d)(1)(b) that permits fee awards to attorneys who’ve prevailed in cases, who did not unnecessarily drag out proceedings and who can show opponent’s positions were “not substantially justified.” When Acreage tallies up the bill he sees 25.1 hours for photocopying, filing and clerical tasks—not exactly fertile ground for that plow, even if it were a John Deere. His “failure to maintain contemporaneous time records, lumping of tasks, vague descriptions of services performed,” all come under the aegis of “troubling”. This is without including his rising rates, from $150phr in 2003, $160phr for 2004, $170phr for 2005—you get the picture?—and modest ones, by most accounts, including a CPA’s.

Also, by this factor (and for a number of them, for that matter) it would be a legitimate to ask if he did anything else during these periods and, if so, where does he draw the line between counsel Varick and client Varick? Certainly, he is a more-than-generous advocate, with his time; returning every phone call, each fax, and the volumes of motion papers he doubtlessly manufactured from scratch…

It took Acreage to remind Varick that he could just as easily disallow the entire award and offered him $125 an hour as the closing cost.

He must’ve felt like Monty Hall.

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