Corporations seek to recover or charge fees for time incurred by in-house counsel in a variety of circumstances in litigation and daily transactions. They may, for example, seek to charge "third parties" -- such as subsidiary corporations or joint ventures -- fees for time spent by in-house counsel. These links explore some of the limits and pitfalls in this exceedingly arcane and complex area.
The more traditional issues were addressed in Illinois St. B. Ass'n Op. 768 (May 12, 1982), with a slight twist. Likewise, the typical scenario and issues were addressed in New Mexico Bar Opinion 1984-13, where the bar analyzed whether a flat fee could be charged to customers of the corporation. See also
New York City B. Ass'n Op. 1994-6;
There is disagreement even in those fairly straightforward areas. In the more complicated matters, the courts disagree and the analysis is sometimes muddled. For example,
Wisconsin v. Hotline Indus., Inc., __ F.3d. __ (7th Cir. No. 99-3256, Dec. 29, 2000) is an interesting case involving government lawyers, and supports an award of market rate fees... except under the removal statutes! When you click on that link, be ready to enter 99 and 3256.
Taking a different approach was the 6th Circuit in a recent bankruptcy decision, In re Brunswick Apartments, the court rejected recovery of "salaries that would have been paid in the same amount in the absence of this controversy," but without considered analysis.
In a recent California Supreme Court opinion, the court held that time spent by in-house counsel on litigation matters which was recoverable by statute was not limited to costs. PLCM Group v. Drexler. (Note that this opinion was later modified slightly. You can click to the modifications from this opinion.)
More recently, in an opinion issued in 2000, the Utah Supreme Court analyzed the question of what amount could be recovered for time spent by in-house counsel in litigation. Softsolutions v. BYU This 2000 opinion contains the Utah Supreme Court's views, on first impression, of recoverability of attorneys' fees for in-house counsel in litigation, and awarding only "cost plus" amounts.
Texas opinions are quite specific on the issue of charging fees, as opposed to recoverability in litigation. For example, Texas Opinion 531 provides that corporations cannot charge market rates even to wholly owned subsidiaries. (Note that you will have to go to Opinion 531 once you get to this site. Also, Opinion 490 deals with the bank-attorney-charges-customers scenario.)
New Jersey Supreme Court Advisory Committee on Professional Ethics Op. 669 (Nov. 2, 1992). Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility Informal Op. No. 92-120 (Aug. 24, 1992). Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility Informal Op. No. 93-116 (July 30, 1993).
Finally, if you are in-house counsel, and you are providing legal advice to an entity that is not totally controlled by your employer, you may want to consider obtaining indemnity from your employer for claims brought by the other entity. See
Oregon Formal Eth. Op. 2001-165 (2001)
The following opinions address issues relating to charging or recovering fees by in-house counsel, but are not (so far as I can tell) available on the 'net:
If you know of others, or know that these are available on the 'net, please let me know.