Ethics

In In re Babcock & Wilson, 526 F.3d 824 (5th Cir. 2008), the court addressed whether the district court had erred in awarding a firm only 50% of its usual hourly rates for time its lawyers spent traveling, but not working, in a bankruptcy proceeding. The statute, 11 USC 330, gives broad discretion to district courts, the Fifth Circuit ultimately held, and so it affirmed the trial court's award of only 50% of the rate for time spent traveling. It suggests, in my view, that any firm seeking compensation for such time be sure to make the record clear that firms in the locality charge for travel time at full rates.

Interesting case in itself, but it reminded me also of the related issue of whether while traveling a lawyer could work on another matter, and bill the time to both clients. (The ABA, y'all know, has said 'no' to that.) Obviously, if there's work the lawyer could be doing for the travel-client, she should travel and work; but what if the lawyer has nothing she can do for the travel-client? If the lawyer can't bill time spent while traveling for the other client and also bill the travel time, then the rational lawyer (rational in terms of self-interest, at least) sits on the plane and enjoys a movie, and does the work for the other client later. I don't see the benefit of that approach. Now, granted, a non-self interested lawyer will work for the second client, and not charge the travel time to the first client, thus putting the client's interest ahead of her own. But, I doubt that happens that much, and so we end up with the lawyer traveling, doing nothing, but then working on the weekend for the other client.

Maybe I'm too cynical.