August 25, 2017 • By Dennis Beaver
“Mr. Beaver, I just got my lawyer’s first bill and can’t believe it! If you gave me a choice between being stung by killer bees or this bill, I’d take the bees in a New York minute,” Sacramento reader Daniel’s email read. Attached was a scanned copy.
It you wanted an example of how not to bill your client, this was it. His lawyer either didn’t know how to bill correctly, or, instead of a padded bra, she wore a padded bill. A quick phone call to Daniel proved both options correct.
“Violating his non-compete contract, a former employee opened his own web design business and immediately began soliciting our clients. I was referred to a law firm that claims to specialize in unfair business practices and met with the attorney on a Friday. She took down initial information and then insisted on us having another meeting Saturday afternoon. I recall that it was a terribly hot day,” Daniel explained.
Billed for the office A/C – Unnecessary Legal Research
“The first thing that jumped out at me in looking at the bill was ‘Minimum charge for driving to office on Saturday and running office A/C $75.00.’ Not only does that seem excessive, but that’s overhead. Can a lawyer bill for office overhead?” My reader asked.
But there was more, much more clearly improper in the bill, with one charge screaming, “Daniel, I’m taking you for a sucker.” It was “4 Hours Legal research into Unfair Competition and Restraining Orders.”
The lawyer’s website boasted of having “Over twenty years experience handling unfair business practices/competition matters.” So, if that’s what you specialize in, how can you justify billing your client for what you should already know?
We ran our reader’s concerns by one of the nation’s leading experts on attorney fees, Missouri attorney John Trunko. He conducts continuing legal education seminars for MyLawCle and the Federal Bar Association.
“It is improper to bill a client for overhead expenses generally associated with properly maintaining, staffing, and equipping an office,” Trunko points out, adding, “This includes A/C and heating bills. Office overhead expenses are the cost of doing business. No matter how hot it was in Sacramento, billing your reader for running the air conditioning on a Saturday or driving to the office are shocking and he should challenge them.”
We asked about this so-called expert in unfair business practices charging Daniel 4 hours for legal research. Isn’t this like getting a bill from your cardiologist which includes a charge for learning how to take blood pressure?
“That’s a good comparison,” he replied. “Typically, lawyers who are experts in a particular area will charge a high hourly rate based on their expertise. They are expected to know the basic law in that area. Billing for research in what the lawyer should already know raises a huge red flag.”
The bill should tell a story – Watch out for vague descriptions
As lawyers sell time, clients have a right to know how their money is being spent. A bill lacking detail is inadequate, and invites billing fraud.
One method of invoicing clients which courts around the country criticize is “block billing.” Trunko explains it as, “The practice of listing a group of tasks in a block summary under a single time entry, such as: Interview witness, draft correspondence, telephone conference with Dr. Smith re treatment, read and summarize deposition of client, review file, revise correspondence to opposing counsel. 8.4 hours.
“A block-bill such as this makes it impossible to know how much time was spent on each activity. Clients have a right to know what work is being done and the time involved, task-by-task.”
And just what should a proper bill look like?
“A lawyer’s bill should tell a story. It should enable someone who knows nothing about the case to identify each specific activity performed, the time spent, its purpose and relationship to the matter,” he maintains. It’s a focal point in his seminars which also stress that lawyers must avoid vague descriptions in their bills.
“A close cousin to Block Billing are terms which lack detail so the client has no idea what was actually done. Examples include: Review file, research, strategy, conference, correspondence, and attention to matter, trial preparation.
However, a proper bill tells the client what specifically was done, why, and the time involved.
“For example: Review plaintiff’s medical records from Memorial Hospital (10 pages) in preparation for deposition of Dr. Smith.
“Research statute of limitations for breach of warranty.
“Telephone conference with insurance company re settlement of case.”
Finally, Trunko recommends at the time you hire the attorney, “To politely make clear that you need detailed bills. If there’s a problem, don’t delay – speak up and ask for more detail.”
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.