Attorneys' Fees in Bankruptcy: Toward Further Reform

The adoption of the Bankruptcy Code has gone far to inject uniformity and predictability into the determination of bankruptcy fees. While there may be variations from court to court, it is generally clear what a bankruptcy attorney must do to assure payment. The attorney must: 1. obtain court approval prior to providing any services, 2. carefully document the services performed and the costs incurred, 3. include this full documentation with the fee application, and 4. in general, conform the fee structure to the prevailing practice in other legal fields in the locality. However, court policy in awarding fees has remained inconsistent by arbitrarily slashing fees in adherence to the old "spirit of economy" principle, which weakens the incentive of competitive fees. The use of "lodestar" analysis to determine fees would provide a potentially objective basis for guaranteeing the fair administration of fees.