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More than 150 state and federal statutes1 allow courts to award attorney fees to parties substantially prevailing2 in litigation. Few of these statutes, however, specify what formula courts ought to use when making fee awards.3 At present, the question of how much losers must pay to winners is a matter of judicial construction of statutes which provide only that the fees awarded be "reasonable."4 The absence of standards has resulted in a lack of uniformity among trial court fee awards. In an effort to develop standards, courts began to require compensation at the "prevailing market rate." The Supreme Court has recently endorsed this approach.5 This article will first analyze different approaches to compensation rates in light of various theories of attorney fees. Second, it will review the case law developing the compensation formulas for court awarded fees and will consider the legislative history of statutory fee shifting. Finally, it will explore the meaning of the prevailing market rate formula and will show that courts using such a formula commonly misapply market rate analysis and fail to appreciate the need for a

Compensation Formulas for Court Awarded Attorney Fees