How IT WORKS
SOME OF THE Legal-Billing Errors We Identify
Block billing is when a lawyer enters multiple tasks under one time period, without separating the time each task took. Here is an example:
7.6 Hours: Telephone call with client regarding assignment of rents; review lease agreement of [company]; draft agreement; emails with opposing counsel; revise agreement accordingly.
Block billing obscures the value to the client and the reasonableness of the charges for a given task. If you don’t know how long it took to draft the contract (because drafting the contract is one of five tasks within a 7.6-hour block of time), you can’t tell if the charge for drafting the contract is reasonable. One study by the California Bar Association concluded that block-billing increases the time charged by an average of 23%.
This is when multiple attorneys within the same firm discuss the client’s matter with each other or seek advice from a colleague about a legal issue. One of the major selling points for larger law firms is that they have a breadth of knowledge in specialized subjects. But when a lawyer seeks a colleague’s advice, the client should not have to pay for one attorney to educate another -- just have the specialist handle that part of the matter.
Higher-Rate Staff Used Inappropriately
Sometimes lawyers will do work that is more appropriate for a lower-rate attorney or a paralegal. As one court quipped: “"Michelangelo should not charge Sistine Chapel rates for painting a farmer's barn." Ursic v. Bethlehem Mines, 710 F. 2d 670, 677 (3rd Cir. 1983).
This is the most common complaint of clients, yet has historically been the easiest for law firms to justify. Many clients have a “feeling” that a certain task took too long, but cannot explain why. SIB Legal Bill Review explains in detail the reasons a law firm should reconsider specific charges on an invoice. Here is an example:
The Law Firm charged 5.1 hours for work on a confidentiality agreement where opposing counsel had already provided a comprehensive draft agreement for comment and markup. This time is excessive. We propose the charge be revised to a total of 2.5 hours: 2.0 for analysis and markup of the draft agreement, and 0.5 for negotiation of points with opposing counsel.
Many times, law firms will charge for a junior-lawyer’s on-the-job training. We believe that the law firm carries the financial responsibility for training its lawyers; it is for the law firm’s long-term benefit. One law firm actually charged $1,084.00 to the client for a junior-lawyer’s time to “Investigate how to file appeal.” Of course, there is a point in the junior-lawyer’s career when he needs to learn how to file an appeal, but the client should not have been asked to pay for that training.
When a lawyer does not adequately describe his or her activity, there is no way for the client to determine if that activity added value for the client or if the charges for that activity are reasonable. Attorneys are paid to be precise in their language. It is not unreasonable to require lawyers to accurately describe how they spent their time and the client’s money.
Overstaffing a Given Task
A client should not have to pay three attorneys to accomplish a task that requires only one lawyer. Defending a deposition and arguing a discovery motion are usually one-lawyer tasks.
Sometimes one attorney will charge for the same task in more than one billing period. Sometimes two attorneys will charge for the same task in the same billing period. Here is our response to an instance of duplicative work:
Junior lawyer charged 25.1 hours ($6,149.50) to draft motion for summary judgment. Senior lawyer charged 14.6 hours ($4,844.00) to draft the same motion at a later date.
The client did not receive 39.7 hours of value in this scenario.
Sometimes law firms will charge attorney or paralegal rates for tasks that could and should be done by administrative staff. For example, the client should not pay $300 an hour for filing a court document. That type of task should be done by a legal secretary at no charge, as part of the firm’s overhead costs.
Discrepancies between Time Entries
Sometimes two lawyers attend the same meeting but charge different amounts of time for doing so. Sometimes one lawyer charges for an in-office task when another time entry shows she was not in the office that day. The variations of discrepant time entries are many, but the conclusion is singular: one of the two time entries is probably inaccurate. When this happens, SIB Legal Bill Review will investigate to determine the proper charge.