Attorneys’ fees have been a hot topic over the last few years, with the Texas Supreme Court and several lower courts weighing in. The question of whether one party should pay another’s legal fees is particularly relevant in commercial litigation, where teams of lawyers may spend thousands of hours on a case, running up extensive legal bills.

Texas follows a long-held common law rule for recovering attorneys’ fees, known as the American Rule. This rule generally provides that each party in litigation must pay their own attorneys’ fees. However, there are exceptions, such as when a statute or a contract allows fee-shifting.

Texas has a specific statute that allows a prevailing party to recover attorneys’ fees from a nonprevailing party if the claim is for:

• Rendered services
• Performed labor
• Furnished material
• Freight or express overcharges
• Lost or damaged freight or express
• Killed or injured stock
• A sworn account
• An oral or written contract

Since the state’s attorneys’ fee statute specifically provides for fee-shifting, it’s fair to say that Texas generally allows a successful plaintiff to recover attorneys’ fees in a breach of contract, whether the contract was oral or written. That may lead one to think the issue is decided, but the statute’s wording makes that less assured. The statute says, “A person may recover reasonable attorneys’ fees from an individual or corporation.” Texas courts have interpreted that language to mean that if there is no fee-shifting provision in the contract, then the prevailing party cannot recover attorneys’ fees from a:

• Partnership
• Limited liability partnership (LLP)
• Limited liability company (LLC)

Calculating attorneys’ fees can also be a thorny issue. In 2019, the Texas Supreme Court clarified how the calculation should work, making two things clear:

• First, the lodestar method is the starting point for calculating fees. Under lodestar, you simply multiply the number of reasonable hours the attorney spent on the case by a reasonable hourly rate (time spent x rate).
• Second, the lodestar result can be adjusted up or down based on several factors, including the difficulty of the questions in the case, time limitations imposed by the client, and the experience and reputation of the lawyer.

If you need representation for a breach of contract claim or a related attorneys’ fees claim, the Law Office of Paul R. Clevenger in Dallas can help. I am up to date on all recent Texas court decisions and can explain in detail how they may affect your case. To schedule an initial consultation, call 469-212-9764 or contact my office online.