When we talk about the practice of bankruptcy law, we swear that we live and die by the Code. Some sit on listservs all day, inhaling the information from colleagues near and far. Others keep by their side a well-worn copy of the treatise put out by National Consumer Law Center.
Whenever an issue arises we check and double-check these trusted resources, searching for guidance. I do it at least a few times a week, and I’m sure you do the same.
Still, one critical document escapes our notice all too often. Something we should all read periodically.
The local rules in effect for your court. And I’m not just talking about spot-checking the rules – I mean sitting down with a cup of your favorite beverage and reading them cover-to-cover.
Here’s why.
I was recently speaking with a colleague about a practice management issue. He was frustrated by the fact that he was being kept in a soul-sucking (and money-losing) Chapter 7 case, one that he readily admitted as having been a mistake to take in the first place.
The client had done a few shady things, hidden them, and was facing a particularly brutal adversary proceeding. Now the lawyer was on the hook.
He swore to me that his local rules kept him in the case regardless of the terms of his retainer agreement. He swore up and down that his judge needed to let him out, and that it wasn’t happening. The local rules, he said, made it so.
He was losing his shirt, and his sanity.
After significant prodding, he went back to the local rules and found that they’d been amended a few years ago to exclude adversary proceeding representation if the retainer agreement specifically excluded them. He didn’t realize it because he hadn’t re-read the rules lately.
He “just knew” what they said. Until he didn’t, that is.
The end result was that a slight re-working of his retainer agreement enabled this bankruptcy lawyer to cut his losses, maximize his fees, and manage his workflow better than ever. All because he sat down to read the most important document out there.
When was the last time you read your local rules?
I have a judge in the western division of my district who thinks any fee that is more than he charged when he practiced (pre-ECF days) is excessive. I filed a case last year where I charged $200 over his “fee”. Never mind that his court is a 2 hour drive from the eastern edge of his division. He issued a show cause for disgorgement of my fee. I attended. He called the case. I told him I just drove 2 hours to get to the hearing. The judge retorted that by my reasoning, if my office was in New York City, should I be able to bill for all the travel time? My response was: according to the local rule that went into effect in April of this year, which by the way you signed, the answer to that question would be YES. He replied: “Oh, you saw that,” and dismissed the show cause.
Moral of the story: Read the local rules once in a while. You might be amazed what is there.