What is the appropriate use of Section 328? Professionals sometimes use section 328 as an alternative means for seeking approval of employment applications, but actually section 328 applies to getting pre-approval for alternative (non-lodestar) modes of compensation. The standard of review for fees earned via compensation structures approved under section 328 is far more restrictive than the standard of review for estate-paid professionals’ fees generally. The Ethics Task Force's proposed Framework for Pre-Approval of Terms for Retention and Compensation Under 11 U.S.C. § 328 suggests specific steps that parties seeking pre-approval of their compensation structures should take. Given how many professionals seek payment of success fees, we think that this part of our Report is a must-read for them.
