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Tuesday, June 5, 2012

Professor Rapoport Quoted in The Wall Street Journal

As reported in the June 2012 edition of Road Scholars, Professor Nancy Rapoport spoke at a public meeting at the Office of the U.S. Trustee (UST) within the Department of Justice (DOJ) about her research on attorney fees in large Chapter 11 bankruptcy cases. The Wall Street Journal recently covered the topic of attorney fees as well as the public meetig at the UST, quoting Professor Rapoport in the process.

As background, the DOJ has grown increasingly restless with attorney fees, which have exceeded $1,000 per hour, paid by companies going through bankruptcy reorganization. The DOJ has advocated an overhaul of the way in which attorneys are paid in bankruptcy cases, and the UST has specifically proposed that law firms make additional disclosures, including fee comparisons between what their firms charge in specific bankruptcy cases and what they charge in other matters (including the highest, lowest and average hourly rates for each). In The Wall Street Journal's recent coverage of the issue, Professor Rapoport was quoted as saying that the proposal is a "'marked improvement' over current attorney fee rules but still lacks teeth. 'Without some well-defined consequences, there's simply no incentive for professionals to take the time to comply.'"