DennisBeaverOctober 14, 2006 (Original publish date) • By Dennis Beaver

Part 1

I have a question for you about excessive attorney fees, and the only reason I am able to even discuss this matter is because of a strange coincidence that happened a few days ago in the Fresno Superior Court.

I am involved in a complicated real estate lawsuit, and the attorney fees are climbing. A neighbor is a bailiff and told me that my lawyer was in his court for a brief appearance on my case. Mine was the first called, took no more than a minute, as it was an agreed continuance, and both attorneys were in court. However – and this is what really is upsetting – my lawyer was there on at least 5 other cases during that same court appearance – which took less than an hour total for all the cases according to our neighbor – and I just received a bill for two hours of courtroom time – a total of almost $600!

If mine was the only case he appeared on, then of course I would have no problem in paying for the court appearance, if it was truly necessary, but shouldn’t his time be apportioned among the various clients? Is this a common practice? This just seems wrong – this is bill padding, unless I am completely mistaken. Is it legal to bill everyone for all the time spent in that one court appearance, or should the time be equally divided among the clients? Jeanne, from Selma.

Absolutely wrong!

After speaking with my Selma reader, I asked her to send me copies of her attorney’s bills and other documents. He is with a major Fresno law firm that has a reputation for doing good work, and for its various charitable activities. The firm may well donate money to support a variety of local charitable causes, but it isn’t their money that pays for the public relations campaign. It’s the client’s money.

The bills I reviewed had so many “Minimum Court Appearance Fee” and “Review File” entries that I wondered if the lawyer was suffering from an early form of Alzheimer’s disease. Of great interest was the fact that the case did not appear overly complicated and mediation could have been arranged – should have been arranged – and there was a letter from the other side urging a mediated settlement. Yet, the attorney refused, instead steered a course onward, to the land of Discovery, Depositions, and Interrogatories clearly living by the philosophy, “What’s good for the client’s wallet is bad for mine.”

My reader has good reason to be more than angry, and she is indeed a victim of what the American Bar Association has stated to be a completely unethical, unjustifiable and yet widespread billing abuse.

Predatory billing practices

“Predatory” billing practices are far more common than most clients realize, and in some firms, the Managing Partner sits down with the new batch of recently hired attorneys and graphically illustrates how to bill for hours they never worked. I am not exaggerating. In gathering material for this story, and the follow-up next week, I spoke with many attorneys, most on the condition of strict anonymity.

“One of the tools used at the first law firm I worked at after law school was a good example of Reinventing the Wheel,” a Ventura County Workers Compensation attorney I spoke with-and who I have known for years-freely admitted. “We routinely charged clients for documents – such as pleadings and interrogatories – developed years ago, merely fine-tuning the content but billing as if we had drafted the thing from scratch. Therefore, we could magically change 30 minutes into three billable hours. If a lawyer objected or did not do as instructed, he or she could kiss their job goodbye,” he said.

“We were instructed to and did bill in excess of 12 hours a day, often more than 16 hours six days a week. As many of our clients were insurance companies or wealthy doctors, we were told to stretch the times to the max, and find ways of going to court even when an appearance was not necessary,” I was candidly told.

“I bill for what I consider reasonable”

In conversations with several attorneys – one of whom strongly suggested that I not write about this topic-there was an amazing justification for what amounted to not just bill padding, but fraud on a massive scale.

“Of course, the only reason we do this is because so often insurance companies underpay their outside law firms. Often it’s a ridiculously small hourly fee, refusal to compensate us for travel time, denial of charges for secretarial services and the like. It takes at least $250 an hour to run a law office, which is why multiple billings for the same time to different clients are necessary in order to be fairly paid. I bill for what I feel is reasonable, and how I write it down does not matter. I view it as a simple issue of how do I get reasonably compensated for the services I provide. I don’t think of this as cheating the system,” I was told, straight faced by one attorney who works for a fairly large statewide law firm.

Ethics? You want ethics?

That these clearly unethical practices occur is less surprising than the attitude taken by members of the State Bar who have admitted nothing short of behavior that could get them disbarred, or jailed for fraud.

In conversations with one California lawyer – the only one who did agree to let me use his name – the consequences of improper billing practices, “may result in civil liability as well as criminal penalties, such as grand theft, petty theft or embezzlement. There is only one hour’s billable time in one hour, and you cannot legally or ethically bill that same hour to several clients just because you were able to schedule several cases at the same time in court,” Los Angeles based Michael R. Brown told me. He is the author of a number of articles on billing practices.

My reader was billed a “Minimum Appearance Charge” of two hours when her lawyer, based on credible evidence, only spent a few minutes simply confirming a continuance of the case and was there on several other matters at the same time. “This is the precise situation some law firms try to create, and it is so easy! Just set a number of matters for the same time, and bill each as if it were the only thing you did. It amounts to theft – that is what this really is – and is extremely difficult to detect, as most clients have no idea as to the identity of your other clients. The more you do, the easier it becomes,” is how one attorney, characterized this practice.

But if you would really like to see some fancy math – and have further reason to closely examine every bill you get from your attorney, especially if that lawyer is an employee in a law firm with many attorneys – it is important to understand the reality of what is expected from the worker bees.

“In our firm, if you do not bill over 2,400 hours a year, then you’re doing something wrong,” is how one “Junior Partner” of a large Southern California law firm puts it. Do the math – that is close to 50 hours a week of billable time.

Billable or bogus time?

In my town alone, we have one firm that has for years dangled the carrot of “Capital Partner” before hundreds of young lawyers, setting out their path to stardom, all through, literally, burning the midnight and weekend oil, cranking out those hours, and then, when they are just about to cash in on their years of sweat-working daily from 8 to 8 and on Saturdays – are canned or forced out. A friend works there, a really good lawyer and nice guy, never home before 9 in the evening. I am just waiting for them to let him go, and it is a crying shame.

“In these mid to mega firms, a lawyer’s job security rarely depends upon the quality of legal work, or sound advice given the client, but one factor alone; hours billed,” were the comments from a Managing Partner at one of the largest firms in the San Joaquin Valley I spoke with that does not have such requirements.

Clearly, not every law firm is guilty of these practices, and I would like to believe that there are many who honestly and correctly bill their clients. But then again, I stopped believing in Santa and the Easter Bunny a long time ago. Next week, how to protect yourself. How to negotiate fees with your lawyer.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.