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A Solo-bomination of An Attorneys Fees Decision

by Carolyn Elefant on January 9, 2012 · 12 comments

in Courts & Practice, MyShingle Solo, Solo Practice Trends

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Would you sacrifice six weeks of revenue for six years and instead, spend those six weeks toiling pro bono for a snowball’s chance in hell of victory before the United States Supreme Court? Small firm lawyer Alan Gura did.

A partner in the two-lawyer firm of Gura and Possessky, Gura was just 32 and eight years out of law school when when he was hired, for “something less than minimum wage” to challenge the constitutionality of DC’s gun ban under the Second Amendment. Gura took the case from its humble origins in federal district court to a landmark win in District v. Heller. As Scott Greenfield points out, not only did Gura successfully reverse longstanding Supreme Court precedent to achieve his client’s win, but he did so as a resource constrained small firm lawyer.

With a story like that, you’d think that Gura would be celebrated as the toast of the town – respected by constitutional scholars and Supreme Court advocates for an extraordinary result or held out as an inspiration to young, unemployed lawyers languishing in document review jobs that taking big risks by starting a practice and handling compelling cases can yield big rewards. You’d think that a court would be eager to heap praises on a young lawyer who gave up six weeks of his life, for six years working for pocket change on a case that many experts regarded as unwinnable and quite frankly, few others were willing to take. You’d think.

But because Gura is a small firm lawyer in Washington D.C.’s caste-like legal community, the extraordinary nature of his accomplishment was trivialized by Judge Emmet Sullivan, who in this ruling lopped a full two thirds off the 2008 attorneys fees petition filed by Gura and his team. Sullivan found that Gura’s work wasn’t sufficiently exceptional to justify an enhanced award of $589 over the $420 hourly rate traditionally applied for similar work Laffey Matrix, and in any event, as a small firm lawyer, Gura didn’t deserve fees comparable to big law attorneys.

As evidence of prevailing market rates for similar work (another metric for rates under fee-shifting statutes), Gura’s petition listed the fees charged by large firm attorneys with comparable experience – which ranged from $500 – $700 an hour. Moreover, Gura’s opponent at the Supreme Court, Walter Dellinger of O’Melvey Myers who represented the District pro bono estimates that his firm loses $1,000,000 in foregone fees just for the Supreme Court litigation alone! Yet, Sullivan awarded Gura’s team – $1.3 million for the entire six year case – scarcely more than the value of Dellinger’s time for once phase of the proceeding.

Judge Sullivan’s decision is outrageous. Although granted, there is precedent to support Judge Sullivan’s approach, courts have fairly wide latitude in awarding attorneys’ fees. Judge Sullivan could have exercised his power to reach a decision more favorable to Gura and his team, but he didn’t. Perhaps, as Scott Greenfield contends it was a political thing, but in my view, the decision results from an utter lack of understanding of, and respect for the work that solo and small firm lawyers do.

For starters, Judge Sullivan found that large firm billing rates had little relevance because Guru is a partner at a two-lawyer firm where he enjoys lower overhead. So what? Even with his less extensive resources and “lack of investment in big firm accoutrements like “librarians, researchers, support staff, information technology and litigation services,” Gura beat a lawyer who typically commands $1 million for a Supreme Court case. If Gura achieved the a better result than lawyers who charge double his rate, shouldn’t he be similarly compensated? Moreover, why should Gura be penalized for keeping his overhead low?

To add insult to injury, Judge Sullivan failed to take into account the impact that such all-consuming litigation had on Gura’s small law practice. Over at O’Melveny, most likely, Dellinger continued to collect his $1.5 million partnership draw even though his pro bono work cost the firm nearly as much. By contrast, Gura lost more than six full weeks of billable time for the six years that he handled the case. That’s six weeks a year where his revenues were zero, and that’s six years where Gura earned less because of his involvement in the Heller challenge. Yet Judge Sullivan’s fee award does not take account of Gura’s lost opportunity costs – even though foregone opportunities impact a small firm’s bottom line as much or more than hefty overhead costs impact a large firm’s earnings.

Not only did Gura forego opportunities, but he took on enormous risk with the Heller litigation. In determining whether a fee , particularly a contingency fee is reasonable, many jurisdictions, including D.C. allow for consideration of factors such as the novelty of the case, time and labor and likelihood of recovery. Yet Judge Sullivan did not consider these factors either. Perhaps O’Melveny and other big law firms have more substantial overhead, but partners like Dellinger collect their draw whether they win a case or not. Gura doesn’t.

What galls me most about Judge Sullivan’s decision is the implicit assumption pervading this ruling: that solo and small firm lawyers are second class citizens who ought to be grateful for any scraps they get. At p. 26 of the Opinion, Judge Sullivan explains that the public is more willing to pay top dollar for large firms because of all of their resources, but not so for smaller firms which don’t have the same “national or international” reputations or profile. Apparently, Sullivan believes that the only reason that someone would hire a small firm lawyer is because they can’t afford biglaw. How insulting.

Judge Sullivan didn’t even compliment Gura on the exceptional nature of his win or applaud a young attorney for staying the course. Instead, he said that there wasn’t enough evidence to persuade him that Guru’s results were extraordinary enough to warrant a higher rate. Yet at the same time, at an earlier hearing, Judge Sullivan was quick to point out how fortunate the District was to have such “outstanding lawyers from outstanding firms” handling the case pro bono.

At the end of the day, I recognize that it’s hard for most folks to feel sorry for Gura. After all, even at the $420/hour rate, he’ll take home an award of $662,000. And on a personal note, having originally become acquainted with Gura on solosez back in 2001 when he was just starting out, I’m thrilled that his investment in the case is paying off both professionally – and presumably financially — through recognition as a preeminent expert on Second Amendment litigation. So even if Gura isn’t getting the fee he deserves for this matter, hopefully all of these ancillary benefits will allow him to recoup his time spent, and then some.

In the long run, the real losers in this decision are solo and small firm lawyers. Judge Sullivan’s decision makes clear that even if we beat an AmLaw 100 law firm and overturn Supreme Court precedent, it’s still not enough — we have to prove our value and worth over and over and over again because we don’t have the cache of an AmLaw 100 law firm. While everywhere else on the planet, actions speak louder than words, here in Washington D.C., solo and small firm actions don’t speak louder when those words are the name of a top law firm.

  • http://constructionlawva.com constructionlaw

    Carolyn,  I fully agree with your assessment.  The work is the work regardless of who performs it.

  • http://www.wiestlaw.com Edward Wiest

    This suggests (as if it’s news) that the biggest obstacle to the increased use of fixed fee/”value” billing to the hourly rate/cost plus methodology may be the courts.

  • Ed

    Complaining about earning $420/hr?  Really?

  • Susan Cartier LIebel

    This is disgusting.  But it is the old boys network and I’m sure the big firms are saying they would have won it, too, had they bothered to take on the case.  This ‘club’ can’t fathom there is talent outside their ‘club’ and talent worth taking stock of.  And this is ignorance is what will ultimately defeat many of them later on.  I also agree with Ed’s comment on value-pricing.

  • http://samglover.net Sam Glover

    No, we’re complaining because the hourly rate would have been higher for another lawyer if he or she worked in a bigger firm.

    If you want to complain about the amount of the hourly fee, that’s fine, but off the point.

  • http://twitter.com/Lawyer_Greg Greg McIntyre

    Maybe they should pay him extra for providing superb legal services efficently by keeping a low overhead. How else are big firm lawyers going to pay off thier ivy league educations and summer in the Hamptons… Really?

  • Mary Ryan

    A case like this can overwhelm a small law firm. I salute the win and the willingness to take the case in the first place. Stupid decision; emblematic of the problem in the profession.

  • http://www.facebook.com/MotorGlassRob Rob Switzer

    Right on-point. I didn’t know Mr. Gura was on Solosez. He spoke at my law school (Toledo) while I was a student there, and he was an incredibly impressive speaker. 

  • Houston Lawyer

    In my opinion, the courts in Texas have always leaned toward the big businesses vs the little guys in their rulings and law-making.  Sounds like the rest of the world is catching up!

  • http://www.morethanbankruptcy.com Goldstein Law Group

    Who cares who did the work? I care about the work itself. If the work is worth the price, then it should be paid regardless of who does it. While I disagree with the outcome of the underlying case, Mr. Gura, in fact the entire small and solo law community, was slighted.

    We are not children. We are no inferior. Our work does and should speak for itself.

  • http://twitter.com/scottwolfejr Scott Wolfe Jr

    This judge’s decision is an example of everything that is wrong with the practice of law in America.

  • http://www.facebook.com/gwiggs Geoff Wiggs

    Funny that he deserves a lesser financial reward for smacking down an OC with nearly infinite resources.

    Yes, David, we know you defeated Goliath, but it didn’t really cost you all that much.  So, here’s a dollar.  Now run along and be a good boy.

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