Chapter 13 “No-Look Fee” Data

For a higher “No Look” fee: 

• We never collect all the attorney fees approved by the court. Far from it. Judges all assume we collect everything “approved”.
  • Doc (1), section IV,E
  • Doc (3), argument 5
  • Doc (7)
  • Doc (8)
  • Doc (9)
  • Doc (10)
  • Doc (11)
  • Doc (12)
  • Doc (13)
• Universally, judges set the “No Look” fee as being the “reasonable” value of the work required in Chapter 13.  Using this as the stated standard, being able to collect anything less would necessarily be  considered less than “reasonable” payment.  “By no fault of our own, we are only able to collect ‘on average’ _____% of what you approved as being ‘’reasonable’.  If you want us to be able to actually collect what you have clearly stated as being ‘reasonable’, the ‘No Look’ fee would have to be raised to $________”. 

NOTE: Math formula: (Correct “No Look” fee) = (Reasonable fee set by court)  / (% “on average” collected).

NOTE: Many, if not most, if not all, “No Look” orders and Local Rules actually include the word “reasonable”.

• Precedent for higher “No Look” fees. Updated spreadsheet of “No Look” fees from around the country.

Doc (14) (as of 2015)

Doc (21) (as of March/2024)

• Why higher “No Look” fees in other jurisdiction and not ours?   Are our attorneys worth less than the attorneys in other jurisdictions?  Should not attorneys her be treated at least as well as attorneys in other jurisdictions?
• INFLATION: Inflation has increased the cost for lawyers and all employees by more than 50% in the last 5 years. We need an increase in  the “No Look” fee of at least 50% just to pay for increase costs from here on out, to help stop the bleeding off of whatever money we have, to keep the staff we have, and to help recoup the cost of higher expenses all through this inflationary period, and to shore up law firms, more and more losing the ability to be profitable as a result of these inflationary increases
  • Doc (3), intro and argument 4
  • Doc (7)
• Chapter 13 cases, post BAPCPA, are now no less work than Chapter 11 cases.
  • Doc (4)
  • Doc (5)
  • Doc (7)
• Feed off of some recent law or local rules change or “red tape” requirement that requires more work, more competence, more highly trained staff.  Example: Enactment of BAPCPA. 
  • Docs (1) and (2)
  • Doc (3)
• “No Look” fee set too low breeds incompetence and/or inadequate representation. 
  • Doc (1), section VI, A.
• An adequate “No Look” fee will encourage good attorneys to stay in bankruptcy practice. 
  • Doc (1), section VI, B
• We need more consumer debtor attorneys.  An adequate “No Look” fee will encourage younger lawyers to enter the practice. 
  • Doc (1), section VI, B
  • Doc (9)
• Better lawyers should be paid more than lazy or less competent attorneys. 
  • Doc (1), section IV, B
• The “No Look” fee should be adjusted according to the geographical location of the attorney’s office. 
  • Doc (1), section VI, D
• Unavoidable Reality: Free initial interviews are necessary, but they are not free to debtor’s counsel. The current economic client has driven up the cost of the free  consult. We file less than 1 client for every 5 free consults we provide. 
  • Doc (1), section IV, K
  • Doc (3)
  • Doc (7)
• Unavoidable Reality: High up-front costs lower the number of filings and low up-front costs increase the risk that attorneys will not get paid for work done. 
  • Doc (1), section IV, L
• Under BAPCPA, chapter 7 flings can no longer subsidize chapter 13 cases. 
  • Doc (1),section IV, M
• Downturns in filings kill us financially. Example: During the last 4 years, filings have been way off. All law firms are hurting financially. COVID hurt filings and therefore drastically reduced income, jeopardizing the sustainability of most law firms to pay fixed expenses, including the cost of keeping good, trained staff.  The current “No Look” fee is not sufficient to allow many, if not most, law firms to bounce back financially, much less hold onto trained staff.
  • Doc (3)
• Cutting back on personnel is not an option.  Good, trained staff cannot be quickly replaced. And when we lose good, trained staff, we can’t get them back and that diminishes the overall pool of trained and experienced debtor-bankruptcy-oriented talent.
  • Doc (3)
• Much higher “No Look” fees in other jurisdictions have not brought the system to a grinding halt.
• Higher fees allow judges to demand better quality work and representation. The judges get what they pay for. 
  • Correspondingly, the less money you get paid, the less services you can provide.
• Higher “No Look” fee will he attract new, younger attorneys into consumer bankruptcy practice.  The sad truth: We need new blood in our bar to replace the “gray hairs” (aka “baby boomers”) who are fast dying out, retiring, or becoming disabled.
  • Doc (3)
• Higher “No Look” fees will incentivize residual “baby boomers” to hire and train their replacements, but time is running out. This is critical because the “knowledge” and “red tape” price of entry into consumer debtor bankruptcy work is too high for young lawyers to pay.  It is almost impossible for a young lawyer to learn it all “on his own” or “on her own”. 
  • Doc (3)
• More broadly speaking, higher “No Look” fees encourage firm growth, thereby fostering  the training of the next generation of trained and experienced attorneys and staff.
• Much higher “No Look” fees would allow for higher starting salaries necessary attract into consumer debtor work  more of the talent currently lost to “Chapter 11” firms.
• Reality: There is a reason why Chapter 11 firms don’t take on Chapter 13 work.  The answer is that: “It’s just not worth it.”  When Chapter 11 attorneys are asked how much of a “No Look” fee would be enough for them to take on Chapter 13 work, the answer is generally something like $12,000, or even higher. 
• Because of BAPCPA and the ever increasing “red tape” and complexity die the, we have to hire smarter staff than we used to. Smarter staff have more options available to them. Therefore, we have to pay significantly higher salaries than previously to attract smarter talent.
  • Doc (7)
  • Doc (3)
• COVID forced us to pay our existing staff more money or risk losing them to less-trained/less-smarts-needed, non-bankruptcy-related jobs that actually pay them more than what we can afford. 
• “Business-related” Chapter 13 cases are more work, most of the time, way more work, and deserve a significantly higher “No Look” fee.
  • Doc (3), argument 8.
  • Doc (7)
• The fact that judges and trustees have not received adequate salary increases should no constitute the basis for denying an increase in the “No Look” fee.
  • Doc (3), argument 7

For higher prioritization n plenty of our attorney fees:

Doc (8)

Doc (9)

There is more than one way to skin a cat. If one door is closed, look for another.

• Get all your consumer debtor colleagues talking and complaining about your “No Look” Chapter 13 fee, and over problems that keep everybody from getting paid a sufficient wage.  Use your best arguments on them first. Ask them what they think are the best arguments.  And remember, I f you are the only one complaining, why should your judges care? If you are the only one complaining, obviously, it’s not that big a deal. Get everyone complaining and you are halfway there. There is a reason mass protests get attention.
• Get a petition signed by a majority of your local colleagues.
  • See Docs (6) and (7)
  • We did this back in 2012
• Identify and approach your bar’s  influencers. Who does everybody listen do?  Who has the most sway with the court? Who runs your local rules committee? What lawyers, trustees or  judges are most approachable?  Get the influencers on board and you are halfway there.
• If available, go see your judges in person, bringing your best arguments and proof with you.
• Ask for a public hearing on the issue, with one or or all of the judges present.
  • We did this back in 2015.
• If applicable, offer up well thought out and reasonable proposed local rules changes.
  • At the request of a judge, we did this back in 2015.
• If your local rules committee has sway, present your case to them.
  • Suggestion: Talk to some or all of them ahead of time.
• Write to your judges. It can’t hurt. If need be write to the judges care of your Clerk of Court.
  • We did this back in 2012.
• Don’t give up. Getting paid what you deserve is important. If the timing is not right, wait a few months and try again.
• Even if you got an increase in the last 2 years, apply again:
  • If the increase you got was not enough, 
  • Your judges left the door open to reapply or for reconsideration
    •    and/or
  • Simply because of the ongoing, acknowledged and manifest devastation caused and continuing to be caused by inflation.
• Follow up, follow up, follow up, with everyone on thing.
  • Too much is always too much, but if your cause is just, always remember that “the squeaky wheel gets the grease”.
• Get NACBA to  work up a open letter to judges to prime the pump for getting you higher “No Look” fees and/or better treatment in the payment of your attorney fees

• We are here to get you more money, the money you need to to both survive and thrive.
• Nothing is more important to your business and success than making sure you get paid enough money to pay your bills, hire and keep good staff, build your business, and be and remain profitable, through thick and thin.
• GUARANTEED: The time you spend to get your “No Look” fees raised with net you the highest hourly rate of return in your lifetime.

NOTE: Based upon the relatively minimal amount of time spent, our efforts to get our “No Look” fees increased will, over the course of my career, have netted my law firm over $100,000/hour.

• Right now, at this point in time, you have a unique opportunity. We “baby boomers” who got the modern day practice started back in 1978, are fast dying off, and the price of entry into this tricky, complex and obscure area of law is too much for the vast majority of young lawyers, most of whom are not even looking this way. If your judges don’t act quickly to allow “No Look” fees to raise to market enhancing levels so that you can hire and train a new generation of attorneys and staff, there will quickly be too few attorneys and staff  to handle now burgeoning demand for the kind of help that only filing bankruptcy can provide.
• Others promise, but only bankruptcy delivers.
• The meek may well inherit the earth, but the meek consumer bankruptcy lawyer will not get the “No Look” fee sufficient to  thrive in business. Shyness and trepidation will get you nothing.
  • • If you need or deserve higher fees or better treatment for your attorney fees…you need to stand up and be counted…to not be ignored.  If you can’t do it alone, get others involved. The fee increases you get help everyone. A rising tide raises all boats, and for the time being, there will be plenty of clients for everyone.
      • Sometimes, reaching out to others for help is the answer. Many times, for as good as we are at standing up for clients, we are terrible standing up for ourselves.
        • Ergo, the phrase: “A lawyer who represents himself has a fool for a client”.
      • Bottom line: Ask not, receive not. 
      • Ask, ask ,ask and you will receive.
        • The squeaky wheel gets the grease.
    • What’s the worse that can happen?
      • You get turned down.
• If you have not recently gotten a substantial increase in your “No Look” fee, the timing could be perfect. If the timing is right to approach your judges, every day of delay hereafter is a day of lost income you could have had and used to rebuild your practice after COVID.
  • That’s why we are here together.
    • We have done it 6 times in North Carolina and I am giving you all my arguments, approaches, practical considerations, and supporting documents
  • In addition, there is even more experience in this room.
    • We will identify some of that experience in the next hour.
  • In addition, the spreadsheet we put together gives you the data on “No Look” fees for all the Federal Districts in all the 50 states. 
  • In addition, the spreadsheet gives you access to attorneys who were likely involved in getting their fees raised, or who will at least be able to direct you to those who did. This will hopefully give you access to the experience of attorneys who already plowed this field, who have been trailblazers, who have succeeded in getting their fees raised, who have the experience to keep you from making mistakes, many of whom will, if asked, provide you with the story of how they did it and what they submitted. Some are in this room.
  • In addition, throughout the rest of this convention, I will be in the “720 System Strategies” booth to answer questions and to strategize and cheerlead you on to success. We have done it many times in our district and my knowledge is yours for the asking.
  • In addition, hopefully, other attorneys in this room, who have had success, will join us in the both to lend their experience and advice to the discussion.  Best yet: You don’t have to reinvent the wheel.
• Whatever you do, don’t give up and don’t give in.
  • Why other Districts and not yours?
  • Do you not work as hard as the attorneys in other Districts?
  • Are you less deserving that the attorneys in other Districts?
  • Should your judges do less for your District than other judges have done for theirs?
  • The squeaky wheel gets the grease. Be the squeaky wheel.
  • Be the presence that cannot be ignored. Not aggressive, but always present. Not to be crude, but “like the turd in the toilet that simply will not flush”.
  • You only get 1 shot at this every so many years.
    • Think out your strategy carefully.
    • Affiliate with other attorneys to build momentum.
    • Identify, convince and activate your district’s influencers to help you, whoever they are.
    • Then, prepare fully, including every good argument available.
    • Where necessary, pick your timing carefully.
      • Has it been long enough since the last increase?
        • Talk to as many judges, trustees and colleagues as possible to determine whether the timing is right.
      • Has something happened that you can feed off of?
        • The laws or rules have changed.
          • Example: The giant law change in 2005
        • The bar is shrinking and needs to attract new blood into the bar.
        • Period of huge inflation, forcing you to pay more for staff or to give raises you can’t afford.
        • It’s been long enough since the last increase.
        • The last increase was not big enough.
        • Change in judges.
        • Effect of some big event like COVID.
        • You keep losing staff to higher paying jobs.
        • Etc.
• Get your colleagues involved and complaining.
  • Why is this important?
    • If you are the only one complaining, your judges will naturally think that no one else cares and therefore, it’s not really a problem or concern and therefore not that important.
    • And remember, the squeaky wheel gets the grease.
      • That’s why mass protests work.
  • Dealing with colleagues
    • Preferably, worked up into a lather regarding the injustice/unfairness of not being paid sufficiently.
    • How?  
      • Use/test your arguments out on them first.
    • Why?  If you can’t get traction with other attorneys, something is wrong.
      • Timing is bad?
      • Need better arguments?
      • You are the wrong person to motivate them?
        • Talk to lawyers with influence or who file more Chapter 13 case.
        • Talk to sympathetic Chapter 13 trustees.
        • If possible, talk to sympathetic judges.
• Take into account that every judge is different than every other judge
  • Correspondingly, your approach has to include arguments and approaches tailored to what each judge cares about, taking into account any pet peeves that might disrupt your initiative.  Remember, it only takes 1 judge to kill the momentum and shut the whole process down.
    • Different arguments and different approaches will appeal to different judges.
      • Example: Judge cares about making sure attorneys get paid.
      • Example: Judge is worried about a shrinking bar.
    • Practice pointer: Use every argument you can think of. 
      • You don’t know what is going to win the day with any particular judge
        • Different arguments will appeal to different judges.
  • Possibly, offer alternative approaches.
    • Big increase now.
    • Smaller increase now and every year foe so many years.
    • Ask for an escalation clause based on inflation.
    • Ask for better payment priority for your attorney fees.
      • Some jurisdictions give all the first dollars paid in.
• Get advice and counsel from everybody, even including recently retired judges or Chapter 13 Trustees.
  • They know your sitting judges better than anyone.
• You may be the one that has to do all the work.
  • At least that was my experience, even though all the other attorneys benefited.

6 Objections to anticipate from your judges and how to respond.

• Our lawyers don’t do a good enough job to be paid more.
  • Responses:
    • The judges “Get what they pay for.
    • The higher the fee, the more quality the judges can rightly demand.
• We just gave you an increase 2 years ago.
  • Responses:
    • It wasn’t enough.
    • We have had 40% inflation since then.
    • The way we get paid is not working or doesn’t comply with the law.
    • By no fault of our own, we are only able to collect _____% of what you approved as being “reasonable”.  If you want us to be able to actually collect 100% of what you approved as being “reasonable”, the “No Look” fee would have to be raised to $________.
• Chapter 13 is not that much work.
  • Responses:
    • We all know this is not true.
      • Provide a list of what all you have to do in even a garden-variety case.
        • Super detailed list of items.
        • Checklists developed by your office or mine.
          • Doc (4) and (5)
        • If you keep paper files, show them how big your files are.
          • In 2015, I presented at our public hearing 3 files that were 4 to 8 inches thick, pointing out the we either had to create or had to read and analyzed every piece of paper in the file.
      • Submit hourly data to show much time is spent on even garden variety cases.
        • One approach is to keep detailed time logs on 1 or more of your Chapter 13 files.
        • Barring that, get detailed time records from an atty who keep hourly records, whether in your jurisdiction or elsewhere.    
• Debtors can’t afford to pay higher fees.
  • Responses:
    • Much higher fees in other Districts have not brought things to a grinding halt.
• When we get an salary increase, you’ll get an increase.
  • Responses:
    • How about you worry about that when we net what you judges get paid?
    • We are not in control of what you judges get paid, but you are in control of what we get paid. Don’t take your frustrations out on us.
    • You always get paid your salary, and will get 100% of you’re salary after you retire. We only collect _____% of what you approved. If you want to at least get us paid what you approved a “reasonable”, we need an increase to at least $______.
• You’re a good attorney, but I can’t justify paying more money to the attorney who don’t do a good job.
  • Responses:
    • Figure out how to punish them. Don’t take it out on the rest of us.
      • Sanctions
      • Public dress bad attorneys down
    • Incentivize attorneys to get better at their craft
      • Higher fees based on specialization certification or recognized skill or experience.
      • Higher fees based on completion of a certain amount of yearly CLE
        • The MDNC requires 12 hours of bankruptcy law CLE each year for higher “No Look” fee.
• If you want to get paid more, keep hourly records and submit your time.
  • Responses:
    • Would cost the loss of most clients. Potential clients, already not able to pay their bills will almost never agree to the uncertainty of hourly billing.
    • Record keeping for hourly billing jacks up the already overburdened debtor’s cost of representation.
    • Most consumer debtor firms are not set up to accommodate hourly billing.
• You need to pick better cases.
  • Responses:
    • We already do.  We only take on cases where is looks like the client can succeed. Otherwise, it’s just folly on our part.  Otherwise, we’re doing it to ourselves.
    • Unfortunately, just because somebody files bankruptcy, does not mean life doesn’t keep happening.
      • And you judges know this because you hear about it every day in response to motions to dismiss and motions for relief from stay.
    • Over 50% of cases fail by no fault of our own. They fail because life keeps happening.
      • Examples: Divorce, loss of job, car repod, sickness, emergencies, etc., etc., etc.

6 Possible Proofs You Will/May Need 

Data from your Chapter 13 trustees on how little you end up being paid, as opposed to what the judges approve.

• Easy for Chapter 13 trustees to pull up on either of the 2 main systems all Chapter 13 trustee utilize (BAS or EPIC).
  • Ask for a report showing a list of all Chapter 13 cases closed in the last 12 month, including both confirmed and not confirmed cases, which includes the following data in Excel or .csv format:
    • Name of debtor 
    • Case no.
    • Date closed
    • Total fees approved
    • Total fees paid

  From this report, you can figure out the following:

  • Percentage of fees approve that were actually paid.
  • Average amount paid per case ( to compare to your “No Look” fee).
  • Examples: See Docs (10), (11), (12), (13), (22), (23), (24) and (25).
• List of all the consumer debtor attorneys who have left in the last 5 years, or who are about to leave, the practice.
  • Ask long-term in practice,  older attorneys, trustees, U.S. Trustees, and/or judges.
  • Look for group photos of your bankruptcy bar from years past, an the “x” out those who are gone.
  • Get lists from old correspondence ent out by the clerk of court or trustees, as, for instance, sent out with regard to announcements.
  • Look around the courtroom. It is almost all “gray hairs” on the consumer debtor side of things.
  • Etc.
• List of how few new attorneys have joined the consumer debtor bankruptcy bar.
  • Pull up calendars
  • Notice that most of the younger one work for creditor representation as firms.
• Testimonials or quotes as to why Chapter 11 attorneys don’t do Chapter 13, and how high the “No Look” fee would have to be to entice them to do so.
  • Easy to get.
• If available, total of Chapter 13  billings from attorneys who bill everything on an hourly basis.
  • PACER
  • Identify attorneys here at NACBA.
• If you keep paper files, show judges the size of some completed files.
  • We did this back in 2015.
• Lists of all the things you have to perform in Chapter 13.
  • For example, see Doc (4) and (5)