A New York Probate Lawyer said that, in this proceeding, the court is asked to determine the attorneys’ fees due the former counsel for the executors of the decedent’s estate. The decedent died a resident of Nassau County on January 30, 2011. A last will and testament, dated December 28, 1995, was admitted to probate by this court by decree dated May 11, 2011. Letters testamentary issued to co-executors of the decedent’s estate. Petitioner law firm had represented both of the co-executors in the probate proceeding, but due to a conflict of interest sought to withdraw as counsel.
A New York Will Lawyer said that, the petitioner submitted an affidavit of legal services, along with detailed time records which itemize the legal services provided and the disbursements made. The billing statements cover three time periods, namely: January 28, 2011 through August 16, 2011, as reflected in Invoice No. 16444, for the amount of $17,490.00 for services rendered, plus $1,528.58 for disbursements, less a credit for $1,280.00 paid; September 9, 2011 through November 22, 2011, as reflected in Invoice No. 16457, for the amount of $2,595.00; and December 5, 2011 through July 10, 2012, as reflected in Invoice No. 16543, for the amount of $11,267.50 The total fee requested by counsel is “a sum not less than $31,000.00,” plus disbursements of $1,582.58, of which $1,280.00 was already paid.
A Nassau Estate Litigation Lawyer said that, the legal services performed can be subdivided as follows: January 28, 2011- March 1, 2011: During this period, counsel spoke by telephone multiple times with a nominated co-executor, and with her daughter, , and he met with her daughter once. Counsel billed $1,295.00 for this work. March 2, 2011 – March 27, 2011: Counsel began working on the probate proceeding, including the family tree affidavit. According to the billing records, counsel also worked on researching and redeeming decedent’s savings bonds, a non-probate asset, as well as bonds belonging to the co-executor and her daughter. The charges for this time period come to $4,537.50. March 28, 2011 – July 17, 2011: On March 28, 2011, counsel sent a retainer letter to confirm that he had been engaged to represent them as co-executors of decedent’s estate and to assist in the transfer of non-testamentary assets. Counsel then continued working on the estate administration, including the renunciation of the other as co-executor and the appointment of the executor in her place. The services rendered included dealing with decedent’s medical bills and counsel’s interaction with banks. Beginning on June 28, 2011, counsel had an associate assist him with rendering legal services to the estate. Documents submitted by counsel indicate that on July 12, 2011, the day after his initial meeting with the co-executor, counsel noted for the first time that decedent’s bank records reflected pre-death transfers by check to the daughter as decedent’s attorney-in-fact. Counsel states that he discussed these checks with the co-executor and explained that they were irregular and might constitute self-dealing by the daughter. Counsel and co-executor agreed to review an additional year of statements. The billable time for this period totaled $7,535.00. July 18, 2011 – November 3, 2011: Counsel’s time records reflect that on July 18, 2011, he began to research the possibility that he had an ethical conflict in jointly representing the co-executors, based upon the exercise of a power of attorney granted by the decedent to which power had apparently been exercised to make transfers to the daughter and the co-executor. The records reflect that counsel continued to represent the co-executors while researching and discussing the issue with his clients. A list summarizing all of the transfers made by them was prepared and sent to both co-executors. Counsel reports that co-executor then advised counsel that he did not want to pursues a claim in connection with these transfers. On September 16, 2011, counsel wrote to the co-executor seeking written confirmation from him that he intended to waive any claim regarding the transfers made by the daughter. The Co-executor did not sign the letter as requested. Instead, he consulted with another law firm, which ultimately was substituted as the co-executor’s new counsel in this matter. The total amount billed for this time period, exclusive of disbursements, was $6,077.50.
Queens Probate Lawyers said that November 4, 2011 – November 22, 2011: On November 4, 2011, counsel advised the co-executors that he could no longer represent them. On November 7, 2011, counsel wrote regarding payment of his invoice and request for the estate file. At that time, counsel also reviewed correspondence from the co-executor. The time records reflect that over the next few days, there was some back-and-forth between counsels and about the transfer of the file and payment of counsel’s invoice. The billable time for this period was $640.00. Counsel also researched filing a claim against the estate and commencing a proceeding to fix and determine attorneys’ compensation. He drafted an affirmation of legal services, along with a petition and citation for the present proceeding. The total bill for this time period, during which counsel appropriately represented only his own interests and the interests of his firm, is $11,267.50.
Long Island Probate Lawyers said the billing statements cover three time periods. The co-executor has taken no position as to the fees and disbursements sought by the petitioner. The other co-executor has filed an affirmation in opposition to the fees sought by the petitioner. She argues that the petitioner should not have performed any further services once it was determined that counsel had a conflict of interest. She also takes issue with the amount of time billed for telephone calls and for postage costs.
The issue in this case is whether the legal fees given to the petitioner law firm is reasonable.
The court bears the ultimate responsibility for approving legal fees that are charged to an estate and has the discretion to determine what constitutes reasonable compensation for legal services rendered in the course of the administration of an estate. While there is no hard and fast rule to calculate reasonable compensation to an attorney in every case, the Surrogate is required to exercise his or her authority “with reason, proper discretion and not arbitrarily”.
In evaluating the cost of legal services, the court may consider a number of factors. These include: (1) the time spent; (2) the complexity of the questions involved; (3) the nature of the services provided; (4) the amount and complexity of the litigation required; (5) the amounts involved and the benefit resulting from the execution of such services; (6) the lawyer’s experience and reputation; and (7) the customary fee charged by the Bar for similar services.
A sizeable estate permits adequate compensation, but nothing beyond that. A large estate does not, by itself, justify a large fee. Further, the size of the estate can operate as a limitation on the fees payable, without constituting an adverse reflection on the services provided. The burden with respect to establishing the reasonable value of legal services performed rests on the attorney performing those services. Contemporaneous records of legal time spent on estate matters are important to the court in determining whether the amount of time spent was reasonable for the various tasks performed.
The invoices submitted by petitioner raise numerous issues, some small and some large. Among the less significant but troubling points is the frequency of telephone calls, many of them seemingly brief, most of which were billed to the estate at .20 hours each, or $70.00 per phone call. The system used by counsel’s firm allows for billable increments as small as .05 hours. The frequency of, and charges for, telephone “conferences” seem excessive. To note just two examples, on March 2, 2011, counsel billed $70.00 for “Telephone conference – set up meeting for next week.” On March 15, 2011, counsel billed the clients $105.00 for telephone conferences, some of which are shown as having been conducted with Federal Express.
In addition, it is evident that many of the services provided by counsel were executorial in nature or were rendered for the benefit of various individuals, not for the benefit of the estate or the co-executors in their official capacities. Inasmuch as SCPA 2307 (1) authorizes the payment of only those legal fees that are just and reasonable, the proponent bears the additional burden of proving that the requested amount for legal fees represents expenditures that were necessary, fair, and reasonable. The court notes that services that are executorial or ministerial in nature are not subject to compensation as legal expenses because the fiduciary is compensated to perform those services out of commissions. The rule against the estate paying legal fees for executorial services is intended to prevent the estate from being billed by the lawyer for what the executor is paid commissions to do.
The court must also disallow the hours shown on petitioner’s time sheets for drafting, revising and discussing the affidavit of legal services. Time spent in preparation of affidavits of services is not compensable. Overall, the total requested fee in excess of $31,000.00 seems quite excessive for the work performed between January 28, 2011 and November 22, 2011, even factoring in the additional services required by co-executor’s renunciation of her appointment as co-executor and counsel’s discovery of transfers by an attorney-in-fact, which ultimately required that he resign as counsel. Undoubtedly, the attorneys currently representing the co-executors will have to eventually address the transfers made under the power of attorney. Still, it is hard to say why this administration should have required more than 106 hours of legal services to date. In addition, more than one-third of these hours were for services rendered after the attorney no longer represented the co-executors.
The court must also address the objections to postage disbursements which were raised. The court finds these disbursements to be in order. Although expenses for postage are considered part of overhead, an attorney may be reimbursed for payments made for express delivery service. According to the petitioner, the clients requested that documents be sent by Federal Express and such charges are documented in an exhibit to the petitioner’s reply affidavit. The petitioner’s other disbursements are proper and include proper credit for a payment made by the co-executor.
Accordingly, the court held that the counsel rendered competent legal services to the estate, including his swift recognition and investigation of the potential ethical conflict which arose during the course of the administration. Despite this, counsel cannot be compensated for excessive billing for telephone calls, administrative and executorial services, time spent preparing his affidavit of legal services, and all of the time invoiced for services performed after counsel advised his clients that he no longer represented them. In consideration of all of these factors, counsel’s fee is fixed in the amount of $17,500.00, plus disbursements of $1,582.58, of which $1,280.00 was already paid by Gloria and $302.58 remains unpaid. This decision constitutes the order of the court and no additional order need be submitted.
A sizeable estate permits adequate compensation, but nothing beyond that. A large estate does not, by itself, justify a large fee. To know whether the legal fees of your counsel are reasonable in handling your probate proceeding case, seek the legal advice of a Nassau Estate Litigation Attorney and Nassau Probate Attorney at Stephen Bilkis and Associates. Call us for free consultation.