Just a couple of thoughts on ASARCO.

I think that the dissent was closer to being right than the majority opinion was (of course I think so:  I was one of four folks on this amicus brief), and that Congress should fix the problem by adopting the test that we proposed in our brief (fees for substantially prevailing).  The majority opinion will tempt parties who like objecting to fees for strategic reasons to do more of these types of objections; professionals may respond by increasing their base rates (or increasing them more rapidly) to take the possibility of objections (and unreimbursed defenses) into account; and a court's only likely response is to consider whether really obviously strategic-only objections were actually frivolous.  On the other hand, there's still the "you don't object to mine, and I won't object to yours" behavior, so maybe the opinion won't have as drastic an effect as I fear.

Our amicus brief in ASARCO was filed yesterday.

And it's here (and here). 

The Akron Law Review ethics symposium issue is out.

See here.  I was there for the symposium, and it was wonderful from start to finish.  My article, The Client Who Did Too Much, is here.

Good practice pointers from Bankruptcy Judge Michael Williamson.

Here, courtesy of the NACTT.

New to practicing bankruptcy law? Where to begin, where to begin....

So I received a copy of PLI's Financially Distressed Companies Answer Book 2013, and it's been waiting for me since June.  For folks who have no background in bankruptcy law, it's a nice way to spot the issues and get some citations.  It gives enough of a forest-trees look to be a good intro to the field.  It's one of several books that provide good intros to bankruptcy law, like Charles Tabb's Bankruptcy Anthology, Michael Bernstein & Jack Ayer's Bankruptcy In Practice, and similar good overviews.

I'd be remiss in not pointing out that there are great treatises out there, too, including an upcoming one from Bloomberg....

Congratulations to Brian Shapiro's FEES program!

The 4th graders in this video did a great job of demonstrating the type of financial knowledge that Brian Shapiro's course teaches.  What a great program!

Congrats to my buddy Sherri Wattenbarger!

She's receiving the 2013 Michael R. Roser Excellence in Bankruptcy Award from the Commercial Law Committee of the Missouri Bar, which recognizes an attorney who manifests the highest standards of excellence in bankruptcy practice, who contributes distinctively to the development and appreciation of bankruptcy law, and who has made an outstanding contribution in the field of bankruptcy practice or administration.  The award is named in honor of the late Michael R. Roser, a prominent Kansas City bankruptcy lawyer.

Congrats, Sherri!

A short interview about bankruptcy fees on Morning Marketplace.

Here.  Thanks, Ann Heppermann!

A shout-out to a wonderful lawyer.

Patrick Driscoll took on a case that I feared was hopeless, thanks to the client's former lawyer.  Patrick stepped in, fixed the multiple mistakes that the prior lawyer had made, and got the client's plan confirmed.  BRAVO, Patrick, and thank you!

New studies on rate increases at law firms--UPDATED

The Wall Street Journal's Jennifer Smith reports that law firms are increasing rates again (here).  I'd love to see those studies mentioned in her article.  The issue of raising rates is, of course, tied to whether those higher rates are collectible.  I could raise my rate to $10,000/hour, but I don't think I could collect any fees at that rate.  And in those practice areas in which rates are reviewed by courts (like my own area of bankruptcy law), raised rates are not a slam dunk.  I'm looking forward to following this story.

Now compare that story to the one that just broke about Weil, Gotshal & Manges laying off sixty associates (here).   That leads credence to my suspicion that, although rates may be going up, the ability of any law firm to collect 100% of the bills based on those new rates may not be going up. 

Best Practices for Working with Fee Examiners

Lois Lupica and I just published an article in the ABI Journal on how best to work with fee examiners in chapter 11 cases (here).  Given the recent publication of the new USTP fee guidelines in larger cases, we think that our article is particularly timely.  We hope that you do, too.

Hey, thank you, Credit Slips!

Lois and I had a blast guest-blogging (and Lois did all of the heavy lifting). 

Today's post on Credit Slips--the ABI National Ethics Task Force's Report on compensation via section 328

Here.

This morning's Wall Street Journal article on the costs and benefits of bankruptcy examiners.

Here.  Among the article's points is that the cost of an examiner has to be compared to the benefits.  That's different, I hope, from demanding that the examiner find enough "bad things" to completely offset his costs.  The idea of "funding by bounty" creates a bad incentive to look at trees instead of forests.

But I've seen good examiners (and good fee examiners) in action.  The ability to figure out what went wrong is a necessary part of a reorganization that's successful in the long term.  And to do that, someone needs to be tasked with taking a good, hard look at what happened to create the need for a bankruptcy filing.

I particularly enjoyed the quotes from William Snyder, now at Deloitte, who's been one of the best CROs I've seen over the years.  His common-sense approach, and his ability to deflect what is often very nasty and personal comments as he's working out causes and solutions, is what makes him good.

But back to costs and benefits.  I'm an occasional fee examiner (yes, and a law professor who studies fees, among other things).  I don't think of myself as saving a lot of monetary costs.  Do I find things that should be cut or reduced?  Sure.  Professionals make mistakes, either clerical or in judgment, and typically they're comfortable fixing those mistakes themselves before I have to bring them to the court's attention.  What I do save is time--the amount of time that my team and I spend going over fee applications is time that a busy and understaffed court really can't devote to the same line-by-line review.

That time savings is also true of examiners generally.  If they do their job well, and if they're mindful of what they are costing the estate, then they can get to the bottom of things in a way that other players in a bankruptcy case just won't have the time or financial resources to do.  There is a law of diminishing marginal returns, of course, and examiners who chase down rabbit holes for too long are overspending other people's money.  But a court can take a gander at interim reports versus fees to see whether an examiner is getting out of line.  (And yes, fee examiners can chat with examiners about their bills, too.)

Bottom line?  Look at the need for an examiner and figure out in advance what goals you want that examiner to achieve.  Make sure that those goals are in the order authorizing employment, and monitor the progress of the examiner's work.  And make sure those goals are aligned with the incentives for compensating the examiner.  Avoid a bounty approach, and you're likely to get what you need to get from your examiners.

National Ethics Task Force Report--Duties of Counsel for the DIP (up on Credit Slips)

Here.

ABI National Ethics Task Force Report--Limited Scope of Representation (up on Credit Slips).

Here.

It's official--the new bankruptcy fee guidelines are rolling out on July 1.

Today's Wall Street Journal has a big article about the U.S. Trustee Program's new fee guidelines for lawyers in larger bankruptcy cases (here).  The rollout of the guidelines isn't a surprise.  The USTP published the proposed guidelines, received comments, revised the guidelines, received more comments, and then promulgated the final version (see here).  As the Wall Street Journal article points out, the next stage of promulgation will address the fees of the non-attorney professionals in the larger cases.

Lois Lupica and I, as part of our follow-up as Reporters for the ABI's National Ethics Task Force Final Report, will be publishing our Best Practices for Working With Fee Examiners in the next issue of the ABI Journal.  (Special thanks go to three people who gave us very helpful comments in our development of our "best practices":  Andy Vara, Robert Keach, and Brady Williamson.)  We think that our suggestions will be useful as people see an increased use of fee review committees and fee examiners.  

All is right with the world this morning.

I'm going to get my Twinkies back.  See here.

Happy Twinkie news....

See here and here.  I'm looking forward to being reunited with my favorite guilty pleasure.

Let's take this two-year/three-year law school proposal a step further.

Today's New York Times has an op-ed by Dan Rodriguez and Samuel Estreicher suggesting that the third year of law school could be optional and used for specialization (here).

I'm not opposed to the idea, and others have suggested it (or things like it) before.  For a good post discussing the pros and cons, see here by Deborah Merritt on the new blog, Law School Cafe.

What intrigues me about the proposal is that recognizes that law school shouldn't be a one-size-fits-all option.  I'm enough of a risk-taker to think that, if state bars would grant a limited license to the folks who graduate after two years and a full license to those who take all three, then those graduates who want to minimize their law school costs and have the (very fulfilling) life as a lawyer doing some sorts of things (but not all "lawyer things") could still serve their clients very well.  (Law is, after all, an undergraduate degree in most countries.)  Two-year graduates who want to expand their practices could maybe return to law school for that third year, or take an additional certification exam, or demonstrate additional competence and judgment in some yet-undiscovered way.

The nice thing is that a move to the two-year/three-year model will, by necessity, force law schools to be more deliberate about their curricular choices.