How ABA Model Rule 1.1 on Competence Impacts How Lawyers Can Ethically Bill

June 21, 2017

[Editor’s note: this is another in a series of blog posts discussing how specific ABA Model Prof. Conduct Rules that all lawyers must follow impacts how lawyers can and cannot bill clients.]

In this blog piece, I will discuss how Rule 1.1 Competence affects how lawyers ethically can bill clients.

Rule 1.1 specifically states that “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”  What Rule 1.1 means in essence is that when agreeing to take on a representation, a lawyer is impliedly – if not actually – making a representation to the client that the lawyer has the basic “legal knowledge” and “skill” necessary to handle the matter.

While issues related to competency can arise in any type of case, they most often arise in non-routine cases. Knowing as I do that most all lawyers hate to turn down business, lawyers often will say that they are competent to take on a case even though they have not handled that specific type of case before.  But if being fully truthful, what they are really saying is that while they believe that they have the “legal skill” to take on the case, they actually lack the “legal knowledge” on the types of issues involved in the case.

The issues most often presented with a lack of “legal knowledge” are billing for excessive research and excessive time for preparation of or revisions of documents.  With regard to research, the ethics of the legal profession are clear.  A lawyer should not charge the client for basic “background research” on the issues involved in a particular type of case. See ABA Annotated Model Rules of Prof. Conduct (7th ed. 2011) at p. 73 citing Attorney Grievance Comm’n v. Manger, 913 A.2d 1 (Md. 2006)(“While it may be appropriate to charge a client for case-specific research  . . . general education or background research should not be charged to the client.”).  Also see New York Assn. for Retarded Children v. Carey, 711 F. 2d 1136 (2nd Cir. 1983) (courts disallowed fees for research into general or basic issues which should be well known to lawyers who claim a competency in a certain practice area).

Unfortunately, I have found over the years that policing the research lawyers do in a case is a pretty hard issue for insurers to effectively do.  For one thing, in looking at the issues researched or the amount of time for the research, e-billing programs many insurers use will only pick up on whether or not a research project over a certain length of time has been approved by an adjuster. And although most company billing guidelines take a pretty firm line on research projects, I have found that many claims adjusters seem to be pretty soft touches in giving authority for research projects requested by attorneys. However, when I observe what I believe to be excessive research – even though it was approved by an adjuster – I always call it to the attention of the manager as a litigation management “training issue.”

The other billing issue most often presented in situations where a lawyer is not experienced in handling the specific types of issues involved in a case is in preparation of documents and especially in revisions to documents.  I have found that taking excessive time to prepare documents and/or taking excessive time to revise documents are often due to the lawyer’s inexperience in handling certain types of cases.

With regard to the point on “inexperience,” the ethics of the legal profession are clear. Lawyers “may not charge clients for time necessitated by their own inexperience.” See ABA Annotated Model Rules of Prof. Conduct (7th ed. 2001) at p. 73 citing   In re Poseidon Pools of Am., Inc. 180 B.R. 718 (Bankr. E.D.N.Y. 1995)(court denying compensation for revising various documents by noting that “a plethora of revisions was necessitated by a level of competency less than that reflected by the Applicant’s billing rates”).

My exerience has been that competency issues typcially arise in two situations. One is in “indepdendent” counsel situations where an insured selects the counsel, ofoten their personal or business attorney. The other is in BIG law firm situations  where the mantra is to feed as many mouths as possible when taking on a representation. Thus much of the work is often shifted to lesser experienced associates who have little to no experience in handling the legal issues involved in a matter.

If you have any questions on competency issues in a matter or on competency in general, please feel free to contact me at

What Clients Should Know About How Attorney Ethical Rules Impact Billing for Legal Fees & Costs

May 4, 2017

If you were to ask a group of lawyers to name an ethical rule that applies to billing for fees, I would suspect at least 90% would name Rule 1.5 Fees – probably because it is the only ethical rule that has the word “fees” in the title!

Now ask those same lawyers to name other ethical rules that may also apply to fee billing and you would probably get mostly puzzled looks. For based upon my own experience in counseling scores of lawyers over the years on ethical issues involved in fee billing, I doubt that 1 in 100 lawyers could correctly name  another ethical rule, let alone several other ethical rules, that might also apply to their billing for fees and costs.

So what are the other attorney ethical rules that apply to billing for fees and costs? Most can be found in ABA Standing Comm. On Ethics and Prof. Resp., Formal Op. 93-379 (1993) “Billing for Professional Fees, Disbursements and Other Costs.” At page 4 of this opinion is a discussion of the various RPCs that may be implicated in legal billing. They include among others, Read the rest of this entry »

A Primer on Increasing Hourly Billing Rates During the Course of a Representation

April 12, 2017

If you recently have had any of your attorneys ask for a 5% increase in their billing rates you might want to refer them to Judge Richard Posner’s recent decision in Prather v. Sun Life . In that case, he found a 5% increase in billing rate to be “excessive!”

Just for kicks, I encourage you to read Judge Posner’s entire opinion in the Prather case. The Judge is well known for his often thought provoking opinions and statements on a wide variety of subjects. He also sometimes has an entertaining tongue-in-cheek way of presenting his opinions and Prather is an example of this.

But back to the subject of increases in billing rates. I often come across this issue in reviewing legal bills in cases or other legal matters which drag on for years. So I thought it time to set out some basic facts on the subject. Read the rest of this entry »

CLM Advisors’ “Snapshot” is Interesting Picture on Use of Third-Party Legal Bill Review Vendors

March 10, 2017

CLM Advisors periodically conducts informal surveys of industry executives to capture how industry executives feel about different litigation and claim strategies. These results of these informal CLM Advisors surveys are compiled into a “snapshot.” Unlike CLM Advisors more formal in-depth “studies,” snapshots are intended to be more informal, point-in-time, “State of the Unions” on particular important aspects of the insurance industry.

With an end view of compiling a snapshot on the state of the use or non-use of third-party legal bill review (LBR) vendors in the insurance industry, CLM Advisors recently surveyed some 125 senior litigation and claims officers. The results of this survey presented an interesting picture on the “State of the Union” on the use of third-party legal bill review vendors in the industry.

But before getting into this Statue of the Union, a brief review of the history of the third-party legal bill review industry may be in order. Read the rest of this entry »

E-Filing is So Easy That Even a Lawyer Can Do It.

January 11, 2017

Electronic filing (e-filing) of documents with state courts  is sweeping the country. If it is not yet in your state, chances are that it will be soon. Here is a list of the status of e-filing in state courts in the states.

Preceding the implementation of e-filing programs, seminars and written material have been provided to lawyers and their staffs on how to use the e-filing system in their jurisdictions. Having attended some of those seminars, I can attest to the fact that e-filing is so easy that even lawyers can do it.

And judging from the time entries in legal bills that I review, many lawyers have begun to e-file their own documents instead of having the legal secretaries or assistants do it for them. Thus, the question: will attorney e-filing of their own documents eventually lead to another round of support staff layoffs like we experienced during the Great Recession? Read the rest of this entry »

Why Legal Fee Dispute Case Law Does Not Change

November 29, 2016

Whenever I make a deduction in a legal bill, I set out a reason for making the deduction.  Usually the reason I set out is grounded in an ethics rule or in well settled case law. And it is not unusual that the case I cite to is 20 or 30 years or more old.  As a result, I have been asked why I do not cite to more recent cases. One of the main reasons I generally give for not citing to more recent case law is that that often there is no more recent case law. Also the case law does not change in this area.

One of the older cases I frequently cite to is Hensley v. Eckerhart, 461 U.S. 424 (1983). Hensley is considered to be the seminal case in attorney fee dispute cases on a number of issues including the burden of proof on an attorney seeking fees in a fee dispute case (prove and establish the reasonableness of each dollar, each hour, above zero”).  Since Hensley was decided in 1983, it has been cited to in 12,487 cases involving fee disputes. That’s 31 cases a month or 1 case every day for the past 33 years including the latest case, Blake v. New York City Health and Hospitals Corp., 110316 NYSDC, 14 Civ. 23340 (JGK)(S.D. N.Y. Nov. 3, 2016).

Another big reason that the case law on legal fee disputes does not change is that unlike tort law that may be “evolving,” legal fee dispute case law stays the same. And unlike some tort law that may be different from jurisdiction to jurisdiction, legal fee dispute case law does not shift from jurisdiction to jurisdiction. As a result, there are very few, if any, splits of authority or “minority” views on legal fee dispute issues.

This main reason for all of this uniformity in fee bill dispute law is that courts basically are applying ABA Model Rule 1.5 (Fees). Read the rest of this entry »

Court Zingers in Legal Billing Cases

July 21, 2016

Over the years, I have read hundreds of cases from throughout the U.S. involving fee billing issues.  From these cases, I have extracted key holdings that I often rely on in making decisions on whether certain billing entries should be reduced or eliminated.

As with most all cases, the holdings in cases on fee billing issues are often very dry. And just like in other cases, courts in fee billing cases sometime get in a good dig or have a pithy way of putting across their point or sending a clear signal to the attorneys seeking approval of their fees that they are on to their games.

Here are some examples. Read the rest of this entry »