Overcharging clients for work not done, double billing, or the classic ‘bill padding’ are unfair practices sometimes as old as the profession. But while most law firms abide by the Rules of Professional Conduct and know firsthand that unhappy clients are bad for business in an industry that heavily relies on word of mouth to thrive, some attorneys rip off the little guy with a clear conscience.
Some of those professionals’ most disruptive practices include:
- Charging for time not spent working on a client’s case
- Charging each of multiple clients the full value of a single piece of work that benefited all clients
- Billing for services that were not rendered
- Billing for services that didn’t benefit the client
- Charging more hours for a task than the lawyer put into it
- Charging for clerical work, and so on.
Just like those questionable contractors paid by the hour, some lawyers will charge you multiple hours even when they could fix your problem in, let’s say, 10-15 minutes.
3 Common Overbilling Practices by Lawyers
According to a 2016 report by the California State Bar, most law firm bills are padded at least 10 to 30%. Here are the three classic ways law firm clients are overcharged.
While most attorneys use specialized time-and-billing apps to keep track of the time spent on a particular task, client, or case, some professionals resort to guestimates when calculating the grand total of billable hours for a client at the end of the month. This practice is also known as block billing, and it is rampant especially in large law firms where lawyers need many billable hours per year to stay afloat.
Block billing is what got a Boston attorney suspended a few years back after she claimed that she had worked 3,173 billable hours and 720 non-billable hours over a single year. The lawyer reportedly relied on her personal assistant to issue first-draft billing reports every month based on the attorney’s personal notes, emails, letters, pleading binders, calendar entries, and even memory.
Investigators found that this blatant case of bill padding cost the law firm’s clients $260,000 in overcharges that year. Add to the inflated attorney fees, the extra costs civil litigation usually entails, such as expert witness pay that may run into tens of thousands of dollars, and you know why lawsuit funding like the Tribeca lawsuit loans has turned from a business niche into a booming industry almost overnight.
‘One Hour’ Billing
Many lawyers charge $300 or more per hour, so just imagine being charged one hour by an attorney after spending just 10 minutes with you on the phone. Or being billed one hour for a letter or brief that took him or her just 15 minutes to write. These things happen, especially to the average Joe or Jane.
Corporate clients, on the other hand, are not that easily tricked. They work with fee schedules, which means that they’ll give the attorney a set amount of time to resolve a task and not let them go overboard by refusing to pay. A corporate client will know that a motion for summary judgment cannot take more than three hours, even if the case is complex and the lawyer might need more than that.
If you read the fine print of your fee contract with your attorney, you might notice that you agreed for him or her to bill you in larger increments than one minute for practical reasons like streamlining record-keeping and billing. In other words, if an attorney uses billable hours and bills in 15-minute increments, you’ll be charged for a 6-minute task as if it took 15 minutes.
The so-called “one-hour” billers intentionally pad their hours by using one-hour increments and billing clients the agreed-upon hourly rate for tasks and services that take no more than several minutes to accomplish. But a 2007 ruling by The Georgia Court of Appeals found that clients facing this type of attorney billing fraud are just as guilty as fraudsters if they fail to “exercise reasonable diligence” when it comes to reviewing the inflated bills.
Some law firms bill clients for clerical tasks such as distributing memos, photocopying documents, organizing files, picking up paperwork, or word processing. But billing clients for secretarial work is not only unfair but also borderline fraudulent as it is a form of double billing. Law firm clients already pay attorneys and paralegals for their legal services, so clerical is already covered.