January 12, 2024 • By Dennis Beaver
Estimates of fraudulent billing run from 21% to over 33%, depending on the research methodology. For many lawyers, the “billable hour” is an invitation to theft.
State bar investigators as well as conversations I’ve had with bar association attorney fee arbitrators have told me that with the glut of lawyers in some areas of the country, complaints of bill padding in recent years have increased.
They cited law firms’ excessive bills for attorneys with “so called expert ability” when in reality, some were fresh out of law school.
The Google Coincidence
From time-to-time, both sides of a dispute go to Google, find one of my articles and call our office. I like that, as it gives me a chance to set up a conference call, get them talking, and help solve their problem.
A Disturbing Story
“Linda” phoned and had quite a disturbing story to tell:
“I have read you since I was in high school and need your advice. I am a recent law graduate working for a large real estate law firm, hired at the insane salary of $200,000 because of my father – he is a well-known judge handing complex real estate cases.
“In law school, I was an average student and took the required one course in real property law – so I am not an expert in the field,” she began.
“But in an office meeting with our client, ‘Logan,’ I was introduced as the firm’s resident expert in real estate law, with a great deal of experience in addition to having ‘learned by osmosis from her well-known land-use guru, superior court judge father.’ I said nothing as I did not want to embarrass my boss, but felt awful.”
Several days later, an administrative assistant took Linda out to lunch and showed her billings sent to Logan and other clients.
“They are billing your time on these cases at an inflated rate, and we both know you never even touched their files, except for being in that meeting. This is fraud. I’ve seen it happen before. I am quitting this job at the end of the month but I do not want to see your career get off to a bad start, so you’ve got to do something.”
Call from Logan
At the very same time Linda was getting an eyeful, Logan phoned my office, “I Googled ‘lawyers padding their bills,’ and found your articles.”
He described the office conference, “Where Linda’s body language was not consistent with someone who felt they even belonged in the room. She was not happy. So, I researched her, finding that she has never had any experience in real estate law.
“What do you recommend? I do not want to accuse her of theft, but this looks really bad.”
Advice from Experts
I said, “Let me get some suggestions from lawyers who deal with these types of issues and set up a conference call with you two.”
So, I ran the situation by a legal ethics professor at a top California law school, and an attorney who represents lawyers who get in trouble with their state bar. Both agreed that the young attorney was personally innocent, but had a duty to Logan, the other victims of the firm’s fraud, and needed to find a new job after she cleared up the over-billing.
They offered these choices:
(1) Tell the senior partner what she had learned but not identify the source of the information, insist that he correct the billings, “and get proof.”
(2) Report the fraud to her state bar. You will no doubt be fired and they will probably try to damage your reputation, so this is not advised, yet.
(3) Speak with Logan immediately, and explain that she had nothing to do with the improper billing. Be up-front, hide nothing.
The Conference Call
Linda agreed to the conference call that proved to be touching. While not her fault, she apologized. Sobbing, she said, “I can’t be a party to this kind of dishonesty.”
And Logan’s reaction?
Talk about empathy. He could have written a book on the subject. “Young lady, when you get relocated, call me. I will have work for you. I am so glad we met.”
Takeaway from the Story
Overbilling is a constant risk clients face. Do your homework. Research any lawyer you are considering retaining. Find reviews, their name on their state bar list of attorneys and see if there is a record of discipline.
Keep careful records of the time you spend on the phone or in meetings.
Finally, if the bill doesn’t make sense, discuss it with your lawyer at no cost!