Lodestar Attorney’s Fees

I have taken some cases on a “lodestar” basis. In a lodestar case, the client pays a reduced fee but asks the court for a full amount of fees regardless. In other words, regardless of what the client pays, the amount demanded in the case is “the number of hours reasonably spent on the case by a reasonable hourly rate.” Herbst v. Humana Ins. of Nevada, 105 Nev. 586, 590, 781 P.2d 762, 764 (1989).

A lodestar approach is not appropriate in all cases. First, the general rule in litigation is that each party bears its own attorney’s fees and costs. But there are some laws, rules, or contracts that allow a prevailing party to be reimbursed for their fees by the other party. These are fee-shifting provisions. In relation to the lodestar approach, Nevada courts have observed that “the ‘lodestar figure’ . . . has become the guiding light of . . . fee shifting jurisprudence and that it has established as a strong presumption that the lodestar represents the reasonable fee.” Cuzze v. University and Community College System of Nevada, 123 Nev. 598, 606 (2007).

The advantage to a client in a lodestar arrangement is obvious. A reasonable rate for a litigated matter may be $275/hr. Under a lodestar arrangement, the client may pay a reduced rate of $125. So, if the case takes 100 hours of legal work, the true value is $27,500 but the client is only out of pocket $12,500 for a savings of $15,000. Nevertheless, the court may grant reimbursement of the true value of the fees.

There are many factors to consider in determining whether a lodestar arrangement is appropriate. Attorneys can be very selective when accepting a case on a lodestar basis because they are taking on some of the risk should the court elect not to award the full amount. For this reason, most cases will not be taken on a lodestar basis.

If you have any questions about the lodestar, including whether it is right for your case, you’re welcome to contact me.