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Fifth Circuit Gives Thumbs Down to Firm's Request for Top Dollar Rates for Travel

Can a law firm charge its full hourly rate for travel time in a bankruptcy matter?  Only if it can show that everyone else is doing the same, says the Fifth Circuit in  Caplin & Drysdale Chartered v. Babcock & Wilcox et. al. (H/T to WSJ Law Blog).

The fee dispute originated when Caplin & Drysdale submitted a request for legal fees to the Eastern District of Louisiana for work performed on a Chapter 11 bankruptcy proceeding involving Babcock & Wilcox.  The bankruptcy court disallowed $135,685.80 of the requested fees, ruling that Caplin & Drysdale was only entitled to 50 percent of its full hourly rate for travel time not spent working. 

Caplin & Drysdale appealed, arguing that it had submitted undisputed evidence to the bankruptcy court showing that its usual custom and practice was to bill clients full hourly rates for non-working travel time.  However, like the lower court, the Fifth Circuit found that Caplin & Drysdale did not submit any specific evidence showing that other law firms shared this billing practice.  Thus, the firm failed to meet the statutory requirement of proving that compensation is based on "customary compensation charged by comparably skilled practitioners" in other cases.

My guess is that most law firms do in fact charge full freight for travel time.  So at least in future cases, Caplin & Drysdale can probably find the support that it needs to recover its entire fee.

Do you think that law firms should charge full fees for travel time?  And how far does travel time extend -- is it just time in the car, or time spent sleeping in the hotel and eating meals?  Send your comments below.

Posted by Carolyn Elefant on May 2, 2008 at 04:20 PM | Permalink | Comments (2)


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