33 Arguments in Favor of Setting a Higher No-Look Fee

1. Consumer bankruptcy attorneys are almost never able to collect all the attorney fees approved by the court. Judges assume we collect everything “approved,” but that is far from the truth.

• You will find all of the supporting documents we used to successfully increase No-Look fees in North Carolina by clicking the Downloads button.

For supporting documents for this argument, see Documents 7-13, as well as Document 1 (Section VI, E.), and Document 3 (Argument 5)

2. Universally, judges set the No-Look fee as being the reasonable value of the work required to file a Chapter 13 bankruptcy. Using this as the established standard, it stands to reason that being able to collect anything less should necessarily be considered less than “reasonable” payment.

• We argue: “By no fault of our own, we are able to collect only _____% on average of what you approved as being ’reasonable. If you want us to be able to collect what you have stated as being reasonable, the No-Look fee would have to be raised to $________.”
• Formula: (Reasonable fee set by court) / (% “on average” collected) = (Correct No-Look fee)
• Note: Many if not all No-Look orders and Local Rules actually include the word “reasonable.”

3. There is a legal precedent for higher No-Look fees.

• See Document 14 (as of 2015), and Document 21 (as of March 2024).

4. Ask: “Why are there higher No-Look fees in other jurisdictions but not ours? Our attorneys are not worth less than the attorneys in other jurisdictions. Shouldn’t attorneys here be treated at least as well as attorneys in other jurisdictions?”

5. Inflation requires higher No-Look fees. Inflation has increased the cost for lawyers and all employees by more than 50 percent in the last 5 years. We need an increase in the No-Look fee of at least 50 percent to:

• Pay for increase costs from here on out
• Stop the bleeding of the money we have
• Keep the staff we have, and
• Help recoup the cost of higher expenses through this inflationary period.

We need to shore up law firms as more and more are losing the ability to be profitable as a result of these inflationary increases

• See Document 7, as well as the introduction and Argument 4 from Document 3.

6. In a post-BAPCPA era, Chapter 13 cases are now no less work than Chapter 11 cases.

• See Documents 4, 5, and 7.

7. Check for and leverage recent laws, local rule change, or “red tape” requirements that add more work, more competence, more highly trained staff–e.g., enactment of BAPCPA.

• See Documents 1, 2 and 3.

8. A No-Look fee that is set too low breeds incompetence and/or inadequate representation.

• See section VI, A in Document 1.

9. An adequate No-Look fee will encourage good attorneys to stay in bankruptcy practice.

• See section VI, B in Document 1.

10. We need more consumer debtor attorneys. An adequate No-Look fee will encourage younger lawyers to enter the practice.

• See section VI, B in Document 1, as well as Document 9.

11. Better lawyers should be paid more than lazy or less competent attorneys.

• See section VI, C in Document 1.

12. The No-Look fee should be adjusted according to the geographical location of the attorney’s office.

• See section VI, D in Document 1.

13. Waiting periods, if any, on “a la cartes” should be removed.

• See section VI, F in Document 1.

14. In retrospect, the current No-Look fee was never enough.

• See section VI, G in Document 1, as well as page 2 of Document 3.

15. Attorney fees do NOT take away from the unsecured creditors.

• See section VI, H in Document 1.

16. The present fee structure amounts to a mandatory, unpaid retainer.

• See section VI, I in Document 1.

17. In Chapter 13, a flat or No-Look fee is preferable to an hourly fee.

• See section VI, J in Document 1.

18. The unavoidable reality is that free initial interviews are necessary, but they are not free to debtor’s counsel. The current economic client has driven up the cost of free consultations. We file for less than one client for every five free consults we provide.

• See section VI, K in Document 1, as well as Documents 3 and 7.

19. The unavoidable reality is: High up-front costs lower the number of filings, and low up-front costs increase the risk that attorneys will not get paid for work done.

• See section VI, L in Document 1.

20. Under BAPCPA, chapter 7 flings can no longer subsidize chapter 13 cases.

• See section VI, M in Document 1.

21. Downturns in filings kill us financially. As an example: During the last four years, filings have been way off. All law firms are hurting financially. COVID hurt filings and therefore drastically reduced income, jeopardizing the sustainability of most law firms to pay fixed expenses, including the cost of keeping good, trained staff members. The current No-Look fee is not sufficient to allow many, if not most, law firms to bounce back financially, much less hold onto trained staff.

• See Document 3.

22. Cutting back on personnel is not an option. Good, trained staff cannot be quickly replaced. And when we lose good, trained staff, we can’t get them back. This diminishes the overall pool of trained and experienced debtor-bankruptcy-oriented talent.

• See Document 3.

23. Much higher No-Look fees in other jurisdictions have not brought the system to a grinding halt.

24. Higher fees allow judges to demand better quality work and representation. The judges get what they pay for.

Correspondingly, the less money you get paid, the less services you can provide.

25. Higher No-Look fee will attract new, younger attorneys into consumer bankruptcy practice. The sad truth: We need new blood in our Bar to replace the “gray hairs” (a.k.a. baby boomers) who are fast dying out, retiring, or becoming disabled.

• See Document 3.

26. Higher No-Look fees will incentivize residual “baby boomers” to hire and train their replacements, but time is running out. This is critical because the “knowledge” and “red tape” price of entry into consumer debtor bankruptcy work is too high for young lawyers to pay. It is almost impossible for a young lawyer to learn it all on his or her own.

• See Document 3.

27. More broadly speaking, higher No-Look fees encourage firm growth, thereby fostering the training of the next generation of trained and experienced attorneys and staff.

28. Much higher No-Look fees would allow for higher starting salaries necessary to attract more of the talent currently lost to “Chapter 11” firms.

29. The reality is this: There is a reason why Chapter 11 firms don’t take on Chapter 13 work. The reason is that it’s just not worth it.

When Chapter 11 attorneys are asked how much of a No-Look fee would be enough for them to take on Chapter 13 work, the answer is generally something like $12,000, or even higher.

30. Due to the ever-increasing red-tape and complexities caused by BAPCPA, we have to hire smarter staff than we used to. Smarter staff have more options available to them. Therefore, we have to pay significantly higher salaries than previously to attract smarter talent.

• See Documents 3 and 7.

31. COVID forced us to pay our existing staff more money or risk losing them to less-trained/less-smarts-needed, non-bankruptcy-related jobs that actually pay them more than what we can afford.

32. Business-related Chapter 13 cases are more work–and they are way more work most of the time. As such, they deserve a significantly higher No-Look fee.

• See Document 7, as well as Argument 8 of Document 3.

33. The fact that judges and trustees have not received adequate salary increases should not constitute the basis for denying an increase in the No-Look fee.

• See Argument 7 of Document 3.

For higher prioritization plenty of our attorney fees:

Doc (8)

Doc (9)