Page 15 - John Hundley 2011

Sharp Thinking

No. 48 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. June 2011
“Reasonable Fees” Awarded

Pursuant to Fee-Shifting Contracts

By Bentley J. Bender, BBender@lotsharp.com, 618-242-0246

As long as there have been attorneys, there have been disputes
about the reasonability of their fees. Earlier this month, the Seventh
Circuit U.S. Court of Appeals clarified what constitutes reasonable
attorneys’ fees in a case that could serve as a cautionary tale to
perhaps overly-ambitious plaintiffs. The court held $563,021.39 in fees
to be reasonable for the defense of a suit alleging that a former
employer breached an agreement with an employee by disclosing more
information than permitted to potential employers. Matthews v.
Wisconsin Energy Corp., 10-2600, 10-3571, 2011 WL 2138151 (7th Cir.
June 1, 2011). Several points elucidated by the court are highlighted
below.

I. Sometimes, attorneys’ fees need not be supported by a detailed bill.

The Seventh Circuit pronounced that the fees awarded pursuant to a fee-shifting agreement do
not need to be justified by detailed supporting documentation or bills. The court cited to its previous
decision in Medcom Holding Co. v. Baxter Travenol Labs., Inc., 200 F.3d 518,
520-21 (7th Cir. 1999), for the proposition that a party to a fee agreement is
entitled to “reimbursement for commercially-reasonable fees no matter how the
bills are stated,” resulting in a “commercially reasonable” standard, which does
not require detailed review of billing records. The relaxed requirements of this
standard starkly contrast with those employed for fee awards in other contexts,
such as pursuant to statute where courts have required that bills list each
activity, the corresponding date, a description of the nature and substance of the work performed, the
time spent on the work, and the attorney who performed the work. See, e.g., In re Harps, 10-31063,
2011 WL 309059 (Bankr. S.D. Ill. Jan. 28, 2011).

II. Attorneys’ fees are reasonable if proportionate to the matter at issue and
opposing counsel’s strategy.

Under Matthews, in determining the reasonableness of attorneys’ fees, a court will look in the fee-

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Sharp Thinking is an occasional newsletter of The Sharp Law Firm, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp
Thinking shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein
constitute educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal
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