A legal battle now before the U.S. Court of Appeals for the Ninth Circuit could have sweeping consequences for how attorney fees are determined in major litigation. At issue is whether boutique law firms should be awarded the same “Big Law” billing rates when they prevail in fee-shifting cases.
The Ninth Circuit, headquartered in San Francisco, recently heard oral arguments in an appeal brought by the small law firm Gaw Poe LLP, which is challenging a district court ruling that denied it the ability to recover rates comparable to those charged by the nation’s largest law firms. The outcome could redefine fee structures in high-stakes cases across the western United States.
The Case That Sparked the Debate
The dispute originates from an antitrust trial in which Gaw Poe represented small warehouse retailers against Prestige Consumer Healthcare Inc., a company accused of charging wholesalers higher prices than large retailers such as Costco. Under federal antitrust laws, victorious plaintiffs are entitled to attorney-fee recovery from the defendant.
Following a favorable verdict, Gaw Poe submitted a request for more than $7.6 million in attorney fees, seeking hourly rates that matched those of elite law firms. The firm argued that its lawyers, many of whom have pedigrees and experience equal to Big Law counterparts, should be compensated accordingly.
But U.S. District Judge Michael Fitzgerald scaled back those requests. While Gaw Poe sought hourly rates as high as $1,314 for senior lawyers and nearly $1,000 for junior attorneys, the judge approved reduced rates ranging from $975 to $1,070 per hour.
Judge Fitzgerald reasoned that awarding “Big Law” rates to a four- or five-attorney boutique representing smaller clients could set a problematic precedent. In his written decision, he remarked:
“Notwithstanding Plaintiffs’ counsel’s background, accolades, and expertise, it is simply unreasonable to award big law rates to a four-person firm representing mom-and-pop warehouses.”
This ruling, Gaw Poe argues, effectively punishes small firms for their size, even when their expertise rivals that of much larger practices.
The Appeal to the Ninth Circuit
Gaw Poe has appealed, asserting that firm size should not dictate compensation. During July’s appellate hearing, Ninth Circuit judges pressed both sides on the rationale behind linking billing rates to firm size. One judge openly questioned: “Logically, why would firm size make a difference?”
Attorneys for Prestige, however, defended the district court’s approach, contending that the legal market does not treat small firms the same as national powerhouses. They argue that because smaller firms typically operate with lower overhead, they cannot command the same market rates as large firms with vast resources, staff, and infrastructure.
Gaw Poe’s legal team countered by emphasizing that many plaintiff-side antitrust lawyers work in boutique practices. Denying them Big Law rates, they argued, would disadvantage smaller firms and discourage capable attorneys from pursuing complex, resource-intensive cases. This, they warned, could tilt the playing field in favor of corporate defendants, who regularly hire top-tier Big Law firms and charge premium fees without question.
Expert Perspectives
Legal scholars and fee experts have weighed in on the controversy, highlighting its potential ripple effects. Jessica Erickson, a professor at the University of Richmond School of Law, noted that attorney rates should reflect skill, experience, and case complexity — not firm size.
“I see no reason why we would vary the fees based on the size of the firms,” Erickson explained.
Similarly, Georgetown University law professor Adam Levitin argued that fee awards should be tied to the market value of the attorney’s work rather than structural differences in firm organization. “The question should be what the market pays for an attorney of that caliber, not how big their office is,” he said.
Yet, there is an opposing view. Many point out that Big Law firms face significantly higher overhead costs due to their size, infrastructure, and staffing. This, they argue, justifies higher rates compared to smaller practices that typically operate leaner and with less expense. The Ninth Circuit now faces the task of determining whether these business realities should carry legal weight in fee-award calculations.
Broader Implications
The Ninth Circuit’s ruling could have far-reaching consequences for litigation strategy and attorney compensation. If the court sides with Gaw Poe, small and mid-sized firms could gain more leverage in pursuing fee-shifting cases, particularly in areas like antitrust and consumer class actions where defendants are often represented by major law firms.
Such a decision could also shift how courts across the country approach attorney fees, potentially reducing the gap between large and boutique firms in high-stakes cases. This might empower more small firms to take on resource-heavy litigation against large corporate defendants without fear of being undervalued if they win.
On the other hand, upholding the district court’s ruling may reinforce existing disparities between large and small firms. Defendants would likely continue to argue that boutique firms are not entitled to the same fee scales, even if their attorneys have equivalent credentials.
What Comes Next
The Ninth Circuit has not yet issued a ruling, but legal observers are watching closely. A decision in favor of Gaw Poe could embolden small firms nationwide to pursue higher fee awards. Conversely, a ruling for Prestige would reinforce the traditional view that Big Law firms command unique market rates that smaller practices cannot match.
Whatever the outcome, the decision is poised to become a leading precedent in fee-award jurisprudence, with the potential to reshape litigation economics in the years ahead.
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