One of the most common questions in a bankruptcy case is the fee: how much will it cost? My answer is it depends on the complexity of the case. The typical attorney fees in my cases range from $900 to $1,200 for chapter 7. Occasionally the fee is higher, for more complicated cases, or where extra work may be needed. My chapter 13 fees usually range from $2,500 to $3,500.
NOTE: in this blog, I am only talking about the attorney fee. The cost of a case also includes the $335 filing fee ($310 in chapter 13 cases), so the out-of-pocket expense for one of my chapter 7 cases is typically $1,235 to $1,535. But for simplicity, I will only discuss attorney fees here, not total costs.
So where do my fees stand compared to other attorneys in the Rochester area? Pretty typical, actually.
To analyze this issue, I reviewed all the bankruptcy cases filed in the Rochester NY Bankruptcy Court between May 1 and May 14, 2015. Since I was looking to see what other attorneys were charging, I did not include my own cases, pro se cases (filed without an attorney), or cases filed by Legal Aid Society. I also excluded "Watkins Glen" cases, where the trustee hearing is held in Watkins Glen NY, as the economics of running a law practice there are different than jn hester.
33 cases were filed in Rochester between May 1 and 14, not including my cases, Legal Aid, pro se and Watkins Glen. 22 different attorneys filed these 33 cases; only one attorney (besides myself) file as many as four cases during this time period.
Three of the 33 chapter 7 cases were business cases; the attorney fees in those three cases were, not surprisingly, the highest three attorney fees charged in the 33 chapter 7 cases.
Of the 30 non-business cases, five included real estate and 25 did not. Of the five real estate cases, the attorney fees ranged from $1,200 to $1,650.
Of the 25 cases without real estate, the fees ran from $600 to $1,500. If the lowest fee and the highest fee cases are deleted as outliers, the range for the remaining 23 cases was from $750 to $1,400. The average fee among these 23 cases was $1,043, and the median (the fees for cases in the center of the range) was $1,000 (six of the 23 cases had this fee).
In only two of the 33 chapter 7 cases was a portion of the fee deferred until after the case was filed. In the other 31 cases, the full attorney fee was paid before the case filed.
17 chapter 13 cases were filed between May 1 and 14, not including my cases, pro se cases, and Watkins Glen cases, and also excluding one case where the attorney fee was not reported. Thirteen attorneys filed these 17 cases; no attorney file more than two cases. Only one appeared to be a business case, and all but one case included real estate.
Attorney fees for these 17 cases ranged from $1,250 to $4,000. Excluding the lowest and highest fee, and excluding one case where the fee was part of a pre-paid legal plan, the fees for the remaining 14 cases ranged from $2,000 to $3,750. The average fee among these 14 cases was $2,975 and the median fee was $3,175.
In every one of these 14 cases, only a portion of the fee was received before the case was filed, ranging from a low of $157 to a high of $3,050. The average fee paid before filing was $1,072 and the median was $910.
MY RECOMMENDATION: Is there any relationship between the fee charged and the quality of the service? This is, of course, entirely subjective, but in my opinion there is a relationship. I reviewed the chapter 7 cases filed in early May where I have an opinion of the work of the attorney involved. I asked myself which attorneys would I recommend to handle a bankruptcy case if, for example, I had a conflict of interest and could not do it myself.
The average fee charged by those attorneys who I would recommend was around $1,200, which was about $150 higher than the average fees charged by attorneys I would not recommend. There was some overlap, but in general, I would be careful before choosing an attorney strictly on the basis of the lowest price.