A recent decision by the  US Court of Appeals for the Third Circuit addressing how attorneys recorded and described their time provides a powerful signal of the importance of keeping contemporary, accurate and detailed records of legal work performed.   In Clemens v. New York Central Mutual Fire Insurance Company, ___ F.3d. ___ No. 17-3150, (3d Cir. Sept. 12, 2018), the court examined a $947,000 attorney’s fees request submitted by the prevailing party in a bad faith insurance case.   Under the applicable fee-shifting statute, the trial court used the common lodestar method to evaluate the fee claim: multiplication of the amount of time spent on legal tasks necessary in the pursuit of the claim by a reasonable hourly rate.  In the eyes of the court, however, this process quickly ran into the obstacle of the attorney’s inadequate descriptions of the time spent.  As the court put it, “many of the time entries were so vague that there is no way to discern whether the hours were reasonable.”  Some entries used descriptions limited to such short phrases as “Communicate,” “Analysis/Strategy,” or “Attorney review.”  The court noted that the attorneys’ failure to maintain contemporaneous time records contributed to the problem.  Ultimately, the appellate court upheld the complete disallowance of any fee award at all because 87% of the entries for hours submitted were too vague to be determined reasonable.  The court also took particular notice of the fact that 562 hours, representing a full 70 days of work, was described as “trial preparation” even though the actual trial took only five days.

The Clemens decision carries implications beyond just practices employed in seeking the recovery of attorney fees pursuant to fee-shifting statutes.   The discussion set forth in Clemens provides a pointed reminder to all attorneys who bill their clients on an hourly rate for tasks perform.   It is paramount that attorneys describe their work accurately, and with specificity, to avoid a Clemens like situation.  The failure to do so can lead to a complete rejection of even reasonable fees if they come alongside unreasonable ones.