Opinion ID: 387362
Heading Depth: 2
Heading Rank: 5

Heading: Fear of Deterring Representation in Title VII Cases

Text: 333 The law firm argues that for three principal reasons the cost-plus formula will deter lawyers from taking on Title VII cases: (1) lower rates of remuneration; (2) difficulty of compiling relevant data; (3) disclosure requirements. 52 334 As to prospective lower rates of remuneration, the question immediately arises, what kind of remuneration have these lawyers been receiving in Title VII litigation? Have they been receiving their customary salary, all overhead, plus an un reasonable profit? If the latter, it is high time the courts and the taxpayers knew about it. 335 If these Title VII litigators have not been receiving fees amounting to all their customary costs plus an un reasonable profit, their fears of the cost plus reasonable profit formula are groundless. 336 One source of these firms' apprehension may be that they are not sure how a reasonable profit will be calculated. Bear in mind that, as explained above, among other factors bearing on profit a trial court should take into account: any contingent nature of the fee, and the extent to which the particular firm depends upon contingent fees; the expertise in Title VII matters which the lawyers bring to the case, which would favor public interest or civil rights firms who could validly claim a larger profit on their specialized line of practice; and the social benefits arising from a class action of this type. Conversely, another consideration, which the trial court should NOT consider as increasing the profit portion of the fee, is a large overhead cost per lawyer hour. This may reflect, and certainly might encourage, inefficiency. While both the large commercial firm and the small firm or solo practitioner devoting itself largely to poor clients should be recompensed in full for actual overhead costs, the lawyer with the larger overhead should not receive a larger profit component of the total fee because of the overhead. 337 Indeed, it is in the trial court's evaluation of the reasonable profit component that the factors we have discussed herein and in our previous opinion come into play to modify, one way or another, the data as to the profit derived from the services of the lawyers concerned. 338 As to the alleged (2) difficulty of compiling relevant data and (3) disclosure of confidential data, these have been discussed above. 339 On analysis, the fears expressed by the appellee law firm and some amici as to any deterrence in doing pro bono work are wildly exaggerated. The Attorney General, who after all bears some responsibility for the public interest, while not receiving all he sought in the opinion of the panel, had a much more realistic appraisal in his Memorandum submitted to the court: 340 What was of principal concern to the Court, and what is of concern to the Attorney General, is recognition of the strong public interest that the computation of reasonable Title VII attorneys' fees not mechanistically set as its cornerstone the 'customary' and unadjusted fees charged by private attorneys in their unrelated and most highly paid lines of work. In this regard, what the panel stated merits repetition here: 341 It is not our intent to establish a subclass of fees payable for Title VII litigation or to relegate, in any way, the vindication of Title VII rights to second-class status. To do so, obviously, would run counter to the very purpose for which Title VII was enacted .... But it is our intent to resist the imposition on the public sector of the highest standards of legal remuneration adopted in the private sector-standards which are out of line with the ethic of public service with which attorneys are encouraged to engage in public interest litigation, and which may even risk turning the public against the very provisions for the award of attorneys' fees on which appellees rely in this case. (594 F.2d at 257 n.75.) 342 The Attorney General, who is committed to the concept of reasonable attorneys' fees for prevailing Title VII plaintiffs, endorses this statement of the panel. 53 343 We also agree with the Attorney General's interpretation that (t)he panel soundly found that the evidentiary record in this court was completely inadequate for the determination of attorney's fees by any method. 54 We find totally inexplicable the majority's refusal to remand this case to the trial court on any theory-the majority's own new formula, previous precedent, or our cost plus reasonable profit method. Not only was the evidentiary record inadequate, but there was a complete failure by the trial court to articulate a rationale on any theory. Is the award of $160,000 really defensible on any method of calculating a reasonable attorney's fee? The Attorney General concluded: 344 (T)he issue of attorney fee compensation for Title VII plaintiffs claiming unlawful discrimination by the federal government is new, difficult, and complex. The traditional customary approaches, as demonstrated by what has occurred in this case, may not be adequate. More refined analysis and consideration of alternatives are required. When representing a private client, attorneys must exercise billing judgment; they must consider the labor expended in view of the result to be achieved. This economic judgment is absent when the federal treasury is footing the bill. Other solutions must be explored. This is what the panel has wisely suggested. 55 345 We in dissent are convinced that the traditional customary commercial fee approach to billing the Government for attorneys' fees in a Title VII case is not adequate and is likely to lead to grossly excessive fees. A new approach is necessary. We have suggested that the trial court apply an actual cost plus reasonable profit formula in this case. Our analysis, in our original opinion and herein above, indicates that this formula would provide a much more precise and equitable basis, both to the Government and the private attorneys engaged in Title VII practice, for the award of attorneys' fees. We have not ruled out any other innovative methods which may commend themselves to the trial court. Since the trial court has yet to hold a hearing in this case, we think it should do so, and that in adducing evidence it should do so along the lines necessary to provide a foundation for the application of the actual cost plus reasonable profit formula. Then the trial court will have the opportunity to apply the actual cost plus reasonable profit formula to the established facts of a comparatively complex attorneys' fees case. The courts and all litigants engaged in Title VII litigation will benefit.