Author: Peter Nikulin

The work of court lawyers is valued very high nowadays, - the representative of one respectable law firm declared in the conversation with our reporter. The Russian law market had some precedents  when the court compensated large expenses from an external law assistance. But it is too early to be positive about it because such cases are still a rare fact in the law practice.

Big projects

An annual law conference was held in Moscow recently. One of the speakers, Sergey Pepelyaev, the managing partner of «Pepelyaev, Goltsblat and partners», the law firm, said the courts had compensated the expenses to the external law assistance up to 10 000 rubles till recently. But «this year the situation has changed as we got the courts’ decision to recover expenses from 500 000 to 1.1 mln rubles. The sums of expenses recovered by the court are growing», - he mentioned.
Iliya Nikiforov, the managing partner of the St.Peterburg branch of «Egorov, Puginsky, Afanasiev and partners», the law firm, gives the same assessment. «There is a tendency to enlarge the costs recovered by the court as a compensation to the external lawyers in Moscow and St. Petersburg. We had some cases when these costs reached $20 000-30 000 and more».
Vladimir Pleshakov, the managing partner of «Pleshakov, Ushkalov and partners», the law firm, analyzing the experience of his company’s work for the last five years mentions the courts became more cautious in recovering compensation costs.
«The rates of  external lawyers expense reimbursement have grown to the comparatively large sums», - he underlines. The arbitrage courts decide the compensation fees should be up to 100 000 – 120 000 rubles on the average.  Three years ago I managed to get the sum of 600 000 rubles as a compensation».
But these sums are probably made up to the representatives of big law firms and participants of large projects. But if we speak about smaller regional companies or smaller cases the situation is not as optimistic.

There is no market information.

V. Pleshakov: In case of giving to the court all the necessary documents of hour payments courts usually demand the documents proving the average rate of the same qualification  lawyers in the given region. It is difficult sometimes, especially in the regions where this system of payment is at the beginning of the way».

Unvalued lawyers

Elena Kazankova, the managing partner of «Law bureau» is convinced the work of the lawyer is valued very low. «The courts compensate business trips, hotels, telephone costs but when we speak about lawyers’ work we can always talk about the reduction», - she admits.
She is supported by Vasily Erofeev, the head deputy of «Forpost-South», the law firm. «Arbitrage courts usually refuse in reimbursement of expenses for a lawyer’s service and subsistence money», - he shared his sad experience. It happens more often in the cases with administrative structures, especially with the customs.
«There is a practice to compensate not more than 30 000 rubles in arbitrage courts. It means the work of lawyers is still undervalued», - Yury Kiyashko, the lawyer from St. Petersburg thinks. More than that, he thinks there is no tendency to increasing of this kind of payments.
Evgeny Kovalev, the advocate from Chelyabinsk, says the biggest sum of money he could have got, was 20 000 rubles. «This happened in the situation when first two courts delivered a negative verdict. The reviewing court decided to repeal the decision and the case started again. The first court thought this case was negated according to the «high difficulty» of the case  (we can easily say «according to the lack of professionalism of certain judges») and satisfied the demands of the principal and recovered the fees», - Evgeny says.
Kirill Sidorenko, the partner of «USB-Consulting» from Krasnoyarsk, also gives picturesque examples of extremely low compensations. 
The question appears – can law firms influence the situation and do everything to make courts repeat the situation when the compensate fees are recovered fully or significantly?

Charge in details

«The indispensable condition of satisfying the demands of compensation fees is the presence of the documentation confirming the factual costs of the client», - says Vladimir Pleshakov. They do not usually take the documents confirming the payment for the lawyer’s «success fees». It coordinates with the position of the High Court of Arbitration, who says it is inadmissible to compensate for the costs as for a percentage fee from the won sum. Nevertheless, if such documents confirming the payment of hourly fees or as fixed rates are presented, the judges become more favourable.

«Success fees» are not liked.

V. Pleshakov: The ordinary courts do not usually let the reimbursement of expenses on the assumption of «success fees», but accept the documents confirming the payment of hourly fees or as fixed rates.

Iliya Nikiforov agrees to this point of view. «When the facts about expended hours are presented in front of the court, this kind of information usually impress judges», - he comments. «In this case they have not an unsubstantiated statement but a detailed report with a grounded explanation of every minute spent on a juridical work», - adds Mr. Nikiforov.

The courts lack objective information about the actual price of different kinds of law services.

Elena Kazankova comes to the same conclusion: «After we had some precedents of lowering the costs we came up with the idea to state the hourly fees and a detailed list of performed works», - she summarizes.

Information field

Nevertheless, the given problem is not removed by this detailed elaboration of costs. «The courts lack objective information about the actual price of different kinds of law services», - Kirill Sidorenko is convinced. «We have the situation when this reasonableness of costs is not legally fixed. It usually comes to the situation when the court decision is very subjective».
The experts suggest to introduce an informational base of law services’ factual costs and of the average law costs in different regions of the country.
Iliya Nikiforov thinks it would be useful if courts themselves summarize the information about the costs they are recovering from as a compensation of law expenses. «The law community, advocate institutions and law firms need to gather the information about the client prices. The comparison of these two sums could serve the purpose of a detailed understanding of this problem», - he mentions.
Vladimir Pleshakov also agrees to it. He suggests to generalize the information about hourly fees in different regions and a lawyer average time spending in different cases in law journals and specialized manuals for lawyers.
Ekaterina Chernyhk, the representative of the law community and the law department head of «Delovoy mir» suggests to gather such information on the level of advocate chambers. «The chambers should value the lawyer costs realistically including the service components, difficulty of the case and others. Such prices should always get renewed», - she considers.
«Besides, this question should always be in the public eye in the good meaning of the sense», - says Iliya Nikiforov. We need to inform the judge society how much a professional lawyer costs and how much the price of each court session would be. The publicity will obtain the adequate response sooner or later».

Changing the psychology

V.Pleshakov (Moscow): Law firms and advocate community should widely use the system of hourly fees in order to gain a fundamental changing of the situation with lawyers’ costs. Such system should become a norm for relations of external lawyers and their clients. The most difficult thing here – to break the psychology of Russian clients who take the system of hourly fees with precaution (especially in the regions of Russia). They usually prefer more common systems of fixed rates or «success fees». To my mind, «success fees» are applied to the relation of certain clients and lawyers (advocates) but can not be applied to difficult cases when a team of highly professional lawyers assist.