Entitled to Legal Fees? Learn How Attorney’s Fees Are Calculated in Court

Imagine being in a lawsuit revolving around a contract dispute. The contract stipulates that the winning party will receive legal fees. If one attorney charges $100,000 for the case and another in the same market charges $30,000, what amount will the court award for your legal fees: $100,000, $30,000, or an average between the two?

Here’s another scenario: one lawyer bills at $1,000 per hour, while another in the same market charges $300 per hour. How do we determine the rightful hourly rate, especially when there’s a disagreement over the legal fees? Let’s unpack the answers to all of these questions!

In awarding attorneys’ fees, a Court must calculate the lodestar amount, “which is the number of attorney hours reasonably expended multiplied by a reasonable hourly rate.” Joyce v. Federated Nat’l Ins. Co., 228 So. 3d 1122, 1126 (Fla. 2017). “Where the legislature is silent on the factors it considers important in determining a reasonable fee, courts may look to the criteria enumerated in rule 4-1.5 of the Rules Regulating The Florida Bar.” Seminole County v. Coral Gables Fed. Sav. & Loan Ass’n, 691 So. 2d 614, 615 (Fla. 5th DCA 1997).

Here is the criteria:

(a)  the time and labor required, the novelty, complexity, difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(b) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

(c)  the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;

(d) significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained;

(e)  time limitations imposed by the client or by the circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;

(f)  the nature and length of the professional relationship with the client;

(g) experience, reputation, diligence, and ability of lawyer or lawyers performing the service and the skill, expertise, or efficiency of effort reflected in the actual providing of such services; and

(h) whether the fee is fixed or contingent, and, if fixed as to amount or rate, then whether client’s ability to pay rested to any significant degree on the outcome of the representation.

1. Regulating Fla. Bar 4-1.5(b)(1).

The first step in the lodestar process requires the Court to determine the “number of hours reasonably expended on the litigation.” Florida Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145, 1150 (Fla. 1985). To accurately assess the labor involved, the fee applicant “should present records detailing the amount of work performed.” Id. The “novelty and difficulty of the question involved” should be considered in determining the number of hours reasonably expended on the litigation. Bell v. U.S.B. Acquisition Co., Inc., 734 So. 2d 403, 407 (Fla. 1999).

The second half of the lodestar equation requires the Court “determine a reasonable hourly rate for the services of the prevailing party’s attorney.” Rowe, 472 So. 2d at 1150. In calculating a reasonable rate, the Court should look to the factors listed above except “time and labor required,” “novelty and difficulty of the question involved,” “results obtained,” and “whether the fee is fixed or contingent.” Joyce, 228 So. 3d at 1126. A reasonable rate is usually “the prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation.” Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988). The party seeking fees “carries the burden of establishing the prevailing market rate.” Philip Morris USA Inc. v. Jordan, 333 So. 3d 300, 304 (Fla. 1st DCA 2022).

“The number of hours reasonably expended, determined in the first step, multiplied by a reasonable hourly rate, determined in the second step, produces the lodestar, which is an objective basis for the award of attorney fees.” Rowe, 472 So. 2d at 1151.There is a “strong presumption that the lodestar represents the reasonable fee.” Progressive Exp. Ins. Co. v. Schultz, 948 So. 2d 1027, 1030 (Fla. 5th DCA 2007).

Now, in cases taken on contingency, courts may allow for a “contingency multiplier”, that is, the lodestar is multiplied by a factor of between 1.5 to 2.5 to account for the risk the lawyer undertook. Courts routinely apply a multiplier to the loadstar amount in contingency cases. In fact, “[o]nce the trial court has arrived at the lodestar figure, if counsel has been employed on a contingency basis, then the trial court must determine whether a ‘contingency risk factor’ multiplier is appropriate.” Nalasco v. Buckman, Buckman & Reid, Inc., 171 So. 3d 759, 762 (Fla. 4th DCA 2015). The Supreme Court of Florida has also held that “[w]hen the prevailing party’s counsel is employed on a contingent fee basis, the trial court must consider a contingency risk factor when awarding a statutorily-directed reasonable attorney fee.” Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 831 (Fla. 1990) (emphasis in original).

As you can see, determining the “amount” of legal fees a prevailing party is entitled to is a complex process. Fee disputes often evolve into separate cases themselves and can persist for many years in certain instances.

For more expert legal guidance on civil trials, business disputes, or attorney’s fees, contact one of our experienced civil trial attorneys at 305-570-2208. You can also email our lead attorney Eduardo directly at eduardo@ayalalawpa.com.

We at Ayala Law PA are passionate about helping those in legal need, so please don’t hesitate to schedule a case evaluation with us online here.