Court Slashes Attorney Fees, Slams ChatGPT

Sands Anderson PC

Sands Anderson PC

US District Judge Engelmayer, from the Southern District of New York, put on a bit of a clinic last week when ruling on an attorney fee application in J.G. v. New York City Department of Education.  The plaintiff’s law firm won for their client, J.G., a special education Individuals with Disabilities Education Act case.  The firm then applied to recover attorneys’ fees for JG, as they’re entitled to do.  It didn’t go, though, like they thought it would.

The firm asked for $113,484.62.  The court awarded less than half: $53,050.13.

How the court came to cut the fee so drastically has some important lessons for those of us asking for fee awards and for those of us defending fee applications.

The court began by rejecting J.G.’s lawyers’ suggested hourly rates.  The firm asked for rates as high as $600 an hour for senior lawyers and as low as $225 an hour for paralegals.  That’s a lot of money to most people.  That said, most of us have seen $1,000 per hour rates, once unimaginable, become increasingly common in recent years.  Nevertheless, the court held the rates in this case were too high.

It had its reasons.

At the outset, the court rejected use of four often referenced sources for attorney fees: the Real Rate Report conducted by Wolters Kluwer, the 2022 Litigation Hourly Rate Survey and Report conducted by the National Association of Legal Fee Analysis, the 50th Annual Survey of Law Firm Economics, and the Laffey Matrix.  None were good gauges, the court concluded, of reasonable rates for special education lawyers in New York.  They were either too broad in the kinds of practices they considered or they weren’t focused on the right geographical market for lawyers.

To bolster its claim for its rates, JG’s firm also claimed that the hourly rates it sought were confirmed by a ChatGPT-4 inquiry on the subject.  The court could not have been more dismissive of using that tool:

It suffices to say that the [the plaintiff’s firm’s] invocation of ChatGPT as support for its aggressive fee bid is utterly and unusually unpersuasive. As the firm should have appreciated, treating ChatGPT’ s conclusions as a useful gauge of the reasonable billing rate for the work of a lawyer with a particular background carrying out a bespoke assignment for a client in a niche practice area was misbegotten at the jump. … In claiming here that ChatGPT supports the fee award it urges, the [firm] does not identify the inputs on which ChatGPT relied. It does not reveal whether any of these were similarly imaginary. It does not reveal whether ChatGPT anywhere considered a very real and relevant data point: the uniform bloc of precedent, canvassed below, in which courts in this District and Circuit have rejected as excessive the billing rates the [firm] urges for its timekeepers. The Court therefore rejects out of hand ChatGPT’s conclusions as to the appropriate billing rates here. Barring a paradigm shift in the reliability of this tool, the [firm] is well advised to excise references to ChatGPT from future fee applications.

Not only did the court reduce the plaintiff’s firm’s hourly rates, it also substantially slashed the number of hours the firm could charge.  After reviewing the firm’s invoices, it noted a number of what it called “inefficiencies” in the billing.  These included:

  • Duplicate billing by timekeepers for reviewing the same set of records.
  • Billing 3.9 hours for a “three-page boilerplate complaint.”
  • Unexplained billing of almost 30 hours before drafting a complaint.
  • Billing 15 hours for “a simple 11-page [complaint]” with “boilerplate requests for relief” that “does not reflect sophisticated legal or factual analysis.”
  • Billing 27 hours for preparing declarations that were “disorganized, duplicative, and difficult to parse.”

So, some lessons for these kinds of fee applications?

  • Good fee applications are supported by affidavits or testimony from competent professionals who can confirm market rates for the work being performed.
  • Proof bills to make sure they make sense to a reviewing court. Honestly, proof them to make sure they make sense to your client.  If the description is vague or causes a disinterested reviewer to blanche, ask yourself if the fee is correct or if it needs to be better explained.
  • If you’re thinking about using ChatGPT as a source for this sort of fee application, think again. Keep thinking again until you stop thinking about using ChatGPT.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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