Today’s story looks at billing practices that may violate ethical rules that apply to lawyers across the country.
Before reading further, if you have hired an attorney recently or in the past few years and still have the paperwork, pull out the retainer agreement and accounting sheet.
Look for this type of language under costs:
“$50 scanning/storage of file fee; $75 file/cost maintenance fee; $75 long distance telephone toll calls/faxes; $75 initial data entry.”
If you have been charged for these thing, especially for long distance telephone calls, depending upon the state you live in, you may very well have been overcharged.
You might recall in the 1980’s a phone call from California to New York cost over 30 cents a minute. However, for the past several years, long distance telephone toll charges vanished.
And, when was the last time you actually mailed a letter? Stamp-licking has almost entirely been replaced by email, both personally and in business.
Ask For Proof of Charges — Stonewalled
Let’s say your lawyer’s bill shows a charge of $75.00 for “long distance toll charges and postage.” You know that just can’t be, but just imagine asking for proof those charges were really incurred, and you are stonewalled. They can’t show proof because those charges did not exist.
You would feel cheated, wondering, “How many other clients have they done this to?”
And that’s exactly what Brittany Zuniga of Fortuna, California, thought after the accounting sheet for her personal injury case included that $75.00 long distance toll/postage charge as well as another $75.00 “as a file and cost maintenance fee,” plus a “$50.00 scanning and storage of file fee.”
In addition to suspecting malpractice, she wondered, “These things sound like office overhead. Should I be paying for that?”
She should not, according to State Bar Associations and the American Bar Association.
But there was even more that Brittany had every reason to be upset about. And it all began in April, 2018 when she was involved in an auto accident, needed legal representation but did not know any lawyers.
Saw Their TV Commercials
“I phoned a law firm that advertises on television. It was a huge mistake,” she told me. “They were disorganized, non-responsive, and settled my case leaving a large hospital bill unpaid. Now I am in collections.”
Bakersfield personal injury attorney David Cohen says that, “Leaving your client open to being sued for a medical bill falls below our professional standard of care. It is a lawyer’s job to have all the bills resolved and when you only have so much money to work with, getting hospitals and health care providers to compromise is often the hardest part of the case, but that’s our job.”
With Brittany’s written authorization, I spoke with the senior partner of this firm–who appears on their TV ads. He denied doing anything wrong, even claiming, “We gave her a discount!”
His retainer called for an attorney fee of one-third. The accounting showed a $10,000 attorney fee out of a $30,000 settlement. There was no evidence of a discount, nor of the $1,000 he claimed to have offered her to help pay the bill.
He also stated, “She told us not to pay that hospital bill and to give her the money instead.” Brittany adamantly denied that. I repeatedly asked him for written proof of his claim–something from her instructing him to not pay the bill.
Any lawyer wanting to protect his firm’s reputation would insist on that from a client. He provided nothing.
“Show me proof that you incurred $75 phone and postage charges for Brittany.” He could not.
Fee Arbitrators Give Their Opinion of Brittany’s Case
I ran this situation by lawyers who serve as attorney fee arbitrators and auditors.
Aaron Shechet, from Los Angeles, stated: “If the retainer agreement provides that they can charge for actual costs, and they are not incurring those costs, charging the client is fraud and could be seen as theft. If they are charging $50 for file storage but all they’re doing is putting the file on a 2 cent CD and keeping it in a drawer, that’s stealing.
Sonoma-California based Jim Schratz has been qualified as an expert on attorney fees in both state and federal court and said, “From my experience, as a fee auditor and attorney fee arbitrator for over 25 years, I would disallow that bill. You need documentation for any charges.
“Moreover, it is improper to wrap up a case with outstanding medical bills, leaving the client exposed. It is too bad that lawyers do things like this instead of just giving top quality service to their clients,” he concluded.
Brittany is filing a complaint with the California State Bar Association who could order that law firm to repay thousands of clients these improper charges.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.