Attorney's Fees Recovery
The conditions and procedures under which a Texas litigant may recover its attorney's fees from the opposing party. Texas follows the American Rule (each side pays its own fees) absent a statutory or contractual exception. The principal statutory exception is Tex. Civ. Prac. & Rem. Code § 38.001, which allows fee recovery on enumerated claim types; HB 1578 (effective September 1, 2021) expanded the statute to permit recovery against LLCs, partnerships, and other organizations.
Texas attorney's fees recovery operates under the American Rule by default, each litigant pays its own fees regardless of outcome, unless a statute or contract authorizes fee shifting. The principal statutory authorization is Chapter 38 of the Texas Civil Practice and Remedies Code, which permits a prevailing party to recover reasonable and necessary attorney's fees on contract claims and certain other enumerated causes of action. HB 1578 (effective September 1, 2021) closed a long-standing loophole that had limited § 38.001 recovery to claims against "individuals or corporations," excluding LLCs and partnerships.
Statutory framework, § 38.001
Section 38.001 enumerates the claim types supporting fee recovery: rendered services; performed labor; furnished material; freight or express overcharges; lost or damaged freight or express; killed or injured stock; sworn account; and oral or written contract. The contract category is by far the most frequently invoked. Recovery is mandatory if the claimant prevails on a valid claim, recovers damages, and proves reasonable and necessary fees. The trial court has no discretion to deny fees, only discretion as to amount.
HB 1578 expansion (post-September 2021)
Before HB 1578, § 38.001 limited fee recovery to claims against "an individual or corporation", language Texas appellate courts strictly construed to exclude LLCs, partnerships, LLPs, and other organizational forms (Fleming & Associates, L.L.P. v. Barton, 425 S.W.3d 560 (Tex. App.-Houston [14th Dist.] 2014, pet. denied)). HB 1578 replaced "corporation" with "organization" and incorporated the Texas Business Organizations Code's broad definition of "organization". The amended statute excludes quasi-governmental entities authorized by state law, religious organizations, charitable organizations and charitable trusts. The change applies only to fee awards in actions commenced on or after September 1, 2021.
Procedural prerequisites, presentment
Section 38.002 imposes a presentment requirement: the claimant must (1) be represented by an attorney; (2) present the claim to the opposing party; and (3) wait at least 30 days from presentment without payment. Failure to plead and prove presentment defeats fee recovery on the underlying claim. No particular form of presentment is required, and courts have accepted both oral and written demands.
Reasonable and necessary, the lodestar method
Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019), is the foundational modern Texas case on fee proof. The Texas Supreme Court adopted the lodestar method as the starting point: hours reasonably expended × reasonable hourly rate = base lodestar. The base figure may be adjusted up or down only for considerations not already accounted for in the hours or the rate, drawing on the eight Arthur Andersen factors. Those include the time, labor and skill required, preclusion of other employment, the customary fee, the amount involved and results obtained, time limitations, the nature and length of the professional relationship, the lawyer's experience and reputation, and whether the fee is fixed or contingent. Contemporaneous billing records are not required, though the court strongly encouraged them when reasonableness and necessity are contested. The proof must still show the particular services performed, who performed them and approximately when, the reasonable time required, and a reasonable hourly rate.
Other fee-shifting authorities
Beyond § 38.001, Texas has dozens of cause-specific fee-shifting statutes: (1) DTPA, Tex. Bus. & Com. Code § 17.50(d) (mandatory for prevailing consumer); (2) Texas Citizens Participation Act (anti-SLAPP), Tex. Civ. Prac. & Rem. Code § 27.009 (mandatory for the movant when a legal action is dismissed, discretionary for a dismissed compulsory counterclaim found frivolous or solely intended for delay); (3) declaratory judgment actions, § 37.009 (discretionary); (4) statutory fraud in real estate transactions, Tex. Bus. & Com. Code § 27.01(e); (5) family code; (6) federal civil rights (42 U.S.C. § 1988). Contractual fee-shifting clauses are generally enforceable absent unconscionability or specific statutory override.
Segregation of fees
Texas requires segregation of fees among recoverable and non-recoverable claims (Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006)). Intertwined facts do not make unrecoverable fees recoverable. Segregation is excused only for discrete legal services that advance both a recoverable and an unrecoverable claim. A failure to segregate does not forfeit recovery, because unsegregated fees are some evidence of the segregated amount. In Chapa the court remanded the fee issue for a new trial. Separate time records for each claim are not required, and an attorney's opinion estimating the share of time attributable to the recoverable claims can suffice.
For Texas commercial litigants, attorney's fees are often the dominant economic stake, particularly in contract disputes where damages are limited but legal expense is substantial. The recurring questions are whether the claim fits § 38.001 or another fee-shifting authority, whether presentment was made, whether the fee evidence meets Rohrmoos, whether fees were segregated, and, for an LLC or partnership defendant, whether the action was commenced on or after September 1, 2021, when HB 1578 took effect. For defendants, fee exposure on a contract claim can exceed the amount in dispute.