“Reconstructed” Time Sheets: Making Up For Lost Time and Them Some

Earlier this month, I reviewed a legal bill that included time entries for work done in February. This reminded me that at this time of the year, attorneys (and paralegals) are likely going back through their files and reviewing previously sent legal bills to see if those legal bills reflected all work undertaken in their files. This likely is being done as attorneys and paralegals scramble to get all their time billed out to clients in order to meet firm billing minimums or be eligible for firm bonuses – or even to retain their jobs.

When an attorney finds that work that has not been previously billed for, it is often due to the fact that the time for the work was not recorded on the attorney’s daily timesheet that is used to generate the attorney’s legal bills.  And when time is not recorded contemporaneously when the work was done, the attorney will attempt to try to “reconstruct” that time by relying upon memory.

When attorneys attempt to reconstruct their time for work done by relying upon their memories rather than upon contemporaneously kept timesheets, courts and legal commentators alike agree that attorneys tend to misstate their time.  As one court put it, “reconstructed records generally represent an overstatement or understatement of time actually expended . . . lawyers who remember spending the entire day working on a case are likely to overstate the hours worked by forgetting interruptions and intrusions unrelated to the case.” Ramos v. Lamm, 713 F.2d 546, 553 n.2 (10th Cir. 1983). Because of a tendency for attorneys to overstate time rather than understate it, courts often do not allow attorneys to collect on legal bills with reconstructed time based upon their memories or make across-the-board cuts in the legal bills. See, e.g., Johnson v. Univ. Col. of Univ. of Ala. in Birmingham, 706 F. 2d 1205 (1983)(11th Cir.).

To address this issue, a company’s billing guidelines should require firms to bill their time on either a monthly or quarterly basis and require that the time billed be based upon time records filled out at the time the work was performed.  Going a step further, billing guidelines could even prohibit billing for work more than a certain number of months (e.g., 3 months) after it was undertaken.

As an alternative, billing guidelines could require that legal bills with time billed for work that was more than a certain number of months in the past (e.g., 3 months) be accompanied by copies of the actual timesheets for those days the work was performed. (No contemporaneously made out timesheet, no pay or reduced pay by a certain percentage.) This would help ensure that the time billed for work on those days was contemporaneously recorded and not the product of an attorney’s overactive imagination.

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Note: This is my last post as I am discontinuing this blog after 11 years and hundreds of posts. Over the years, I have discussed every conceivable legal billing issue. Also during this time, I have communicated with many followers of this blog who have contacted me to discuss various legal billing issues. I encourage you to continue to contact me if you have a legal billing question or just want to kick around a billing issue. And don’t forget to contact me if you have legal bills you would like me to review or you need an expert witness in a fee bill dispute case. I can be reached at jconlon@legalpointsllc.com.

Why Excessive Reviews and Revisions of Work Can Raise Both Billing and Competency Issues

Recently I saw something unusual in a legal bill.  A senior partner actually billed “N/C” (or no charge) for the time spent on reviewing and revising the work of a subordinate attorney.

Before going further, let me state that in my CLE seminars for attorneys on the ethics of legal billing, I always suggest that in their fee bills they include work they may have done but did not charge for.  This is good P.R. as it allows clients to see all the hard work that the attorneys are actually putting in.  (I also suggest that they actually look over their bills before they go out to clients as I often see grammatical and other glaring mistakes in bills.)

But I do find that writing off time to review a subordinate’s work to be unusual. This is because I mostly see attorneys billing their full time spent on reviewing the work of subordinate staff. However, reviewing subordinates’ work to see if it has been correctly done is considered to be non-billable attorney administrative “overhead.” See In re Big Rivers Elec. Corp., 233 B.R. 768, 780 (Bankr.W.D.Ky.1999), rev’d on other grounds, 252 B.R. 393 (W.D.Ky.2000) (regarding “reviewing the work of associates . . . the costs associated therewith are [overhead] expenses to the firm.”). Also see Toothman & Ross, Legal Fees, (Carolina Academic Press 2003) at p. 44 (“Time expended by the lawyer on law firm administration or management is not normally billable (including) time spent . . . reviewing work of staff” citing Restatement (Third) The Law Governing Lawyers, Sec. 38(3)(a).).

By the same token, any time spent by a supervising attorney to “revise” a document prepared by a subordinate also should be considered as non-billable supervisory time. In this regard, I recently reviewed a bill in which an associate billed 1.1 hour to prepare a motion and the senior partner billed .8 hour to review and revise the motion.  For a senior partner to take almost as much time to revise a document as the associate did to draft the document generally means just one thing: the original draft was a sub-standard work product. And if so, it should go without saying that the client should not be billed for the time it takes to revise the work product to make it a competent work product. See Comments to ABA Model Rule 1.5 (“Lawyers are expected to provide competent representation (see Model Rule 1.1) and therefore may not charge clients for time necessitated by their own incompetence.”).

But what if a supervising attorney is repeatedly billing N/C for repeated reviews and revisions of a subordinate’s work product? What’s wrong with that? What is wrong with that is if there are repeated reviews and revisions by a supervisor, a question is raised as to whether the subordinate really is competent enough (or just too inexperienced) to be working on the matter,

A variant of the review done by supervisors is the review done by peer attorneys. And to be sure, there are times when review and revision by another attorney may be warranted. An example might be where a tax attorney reviews a brief prepared by an IP attorney because the brief has a section on a possible tax issue. But generally, reviews and revisions of documents by other attorneys are not favored by courts particularly where attorneys are all billing to review and revise each other’s work or are jointly participating in drafting the same documents. See Ash Grove Cement Co. v Liberty Mut. Ins. Co., 3:09-CV-00239-HZ, 2014 WL 837389 [D Or Mar. 3, 2014)(reduction of fees warranted for attorneys spending time reviewing and revising each other’s work ); Miller v. Holzmann, 575 F.Supp.2d 2 (DDC 2008)(where 7 lawyers participated in drafting/revising a complaint, “drafting by committee is a recipe for inefficiency”).

And reviews by other attorneys are especially seen as not necessary or reasonable if the attorney who drafted the original document is an experienced attorney. See Cox v. Council for Developmental Disabilities, Inc. No. CIV-12-0183-HE, United States District Court, W.D. Oklahoma, May 8, 2013. (“counsel  . . . should be experienced enough that substantial review and revision by other attorneys is unnecessary.”). But if the attorney doing the drafting is not experienced enough that reviews and revisions are seen as necessary, then those reviews and revisions – whether by a supervising attorney or by peer attorneys – should be viewed as non-billable as law firm supervisory “overhead.”

But even if there are no reviews and revisions being made by a supervising attorney or other attorneys, there still is an issue with multiple revisions being done by the drafting attorney. And unless there is a reasonable excuse for the revisions (such as receipt of new information), multiple revisions are more likely to be considered as “remedial work.” And depending upon the extent of the remedial work, issues relating to inexperience and incompetency may be raised. See Annotated Model RPC (8th ed. 2015) Comment to RPC 1.5 at p. 81, “Doing Remedial Work.”(“Lawyers are expected to provide competent representation (see Rule1.1); they may not charge clients for time necessitated by their own inexperience.” citing In re Poseidon Pools of Am. Inc., 180 B.R. 718 (Bankr. E.D.N.Y. 1995)(in denying compensation for various document revisions, “we note that given the numerous times throughout the Final Application that Applicant requests fees for revising various documents, Applicant fails to negate the obvious possibility that such a plethora of revisions was necessitated by a level of competency less than that reflected by Applicant’s billing rates.”).

Finally, to determine if any revision (or a plethora of revisions) to a document is acceptable or reasonable, it is important that the biller (whether it be the drafter of the document, a supervising attorney, or peer attorneys) clearly state what the purpose and substance of the revision. Thus, entries such as “revise answering brief” should never be accepted as a sufficient explanation of the task. See Hawaii Ventures, LLC v. Otaka, Inc., 173 P.3d 1122 (Hawai’i 2007)(court finding “vague” and non-compensable entries such as “Research and revise answering brief”).