How To Discuss Fee Bill Issues With Your Lawyer – Part II

[Note to readers: This is the second part of my blog post on how to discuss fee bill issues with your attorney. If you did not read the first post, I suggest you do so before reading this post. The prior post immediately follows this post.]

Communicating with Your Attorney

My prior post left off with the assumption that you have identified the specific billing issues you object to and have determined that you have adequate grounds to proceed. The next step is to communicate  directly  with  your  lawyer.

Prompt Communication is Important

It is important that  you  should  communicate your concerns  as promptly as possible. And if you owe money on the bills at issues, it is  especially important that you  do not  ignore  demand  letters  your lawyer may send seeking payment by thinking that he cannot collect because her bills were in error in some respects. I once had an individual come to me for help with a billing dispute after the lawyer had not only filed a suit for collection, but had received a judgment.

At the very least, if you wait until a lawyer has obtained a judgment for payment of outstanding legal fees, you are not at all in a good bargaining position. About your only option at that point is to file a disciplinary complaint if the billing issue(s) concern an ethical issue. However, note that while a lawyer disciplinary agency may discipline the lawyer for any ethical misconduct, the agency may not able to recover moneys paid to the lawyer except in more egregious cases.

Back to communicating with your lawyer. One important thing to keep in mind about communications with a lawyer is that all lawyers  have  an  ethical  duty to  adequately communicate with their clients about their fee bills.  See RPC  1.4  Communications. So  if  your  lawyer  refuses  to communicate  with  you  promptly  and  address  your  concerns, you  may  have grounds  for  filing  a  disciplinary  complaint  against  the  lawyer  (more on this point later).

Billing for Billing & Billing for Answering Questions on Billing

In communicating with your lawyer on a billing dispute, keep in mind that it can sometimes be a long and drawn out process. Thus, you may be wondering, “will I just be digging myself into an even deeper financial hole by incurring even more legal expenses by trying to negotiate a fee reduction with my lawyer?”

The answer to that question is an easy one.  It is an emphatic “NO.” The reason for that no answer is simple.  A lawyer cannot bill time to either prepare bills to you or to answer any of your questions on those bills.  See, e.g., Inlow v. Estate of Inlow, 735 N.E.2d 240 (Ind. 2000). As I frequently tell people, answering questions about billing statements is about the only truly “free” service you have a right to expect from your lawyer!

Getting it in Writing, Keeping it Civil, and Keeping it Private

All communications with your lawyer on any issue involving the fee bill dispute should be in writing. Even if you communicate orally with your lawyer on your concerns, you should follow up that oral communication with a letter or email that “memorializes” the oral communication.

You may be upset and even very angry about the legal bills you have received from your lawyer.  But, you should remember to be polite and maintain a civil tone in your communications with the lawyer.   Also  do  not  make  a  threat to do  something unless you are prepared to act on that threat.

Finally, keep your billing dispute private.  If you discuss your dispute with friends or relatives (or post it on social media) and accuse your lawyer of billing fraud or unethical behavior and this is repeated to others, your attorney may have a cause of action against you for slander or defamation.

Contacting the Managing Partner or Other Partners in the Firm

If you do not get satisfactory answers from your lawyer or you have come to the point where you cannot resolve the dispute with your lawyer, your next step should be to consider contacting the firm’s “managing partner.” If  the firm is small  and does not have a managing partner, but there are other partners, those other partners should be contacted.

The reason to bring the managing partner or possibly other partners into the dispute is because ethically and legally, other partners in the firm can be held liable for the overbilling or for the fraudulent conduct of one of their partners. I covered this issue in prior prior posts including one entitled “How One Lawyer’s Violation of Ethical Rules on Fee Billing Can Affect Others in the Firm.”  Thus, the other partners would have a vested interest in seeing that the billing dispute with you is satisfactorily resolved.

As with your communications with your lawyer, your communications with the managing partner or other partners in the firm needs to be in writing.

Next & Final Steps to Take

If you have been unable to resolve a fee bill dispute with your lawyer (or the firm’s managing partner) or the lawyer refuses to discuss or answer your questions, what are the next steps to take?  I’ll cover the next and final steps you can take in the third and final post in this series.

 

 

 

The Lowdown on How To Discuss Fee Bill Issues With Your Lawyer

While most all of my blog posts have been directed to the corporate world and to lawyers, I thought it about time to write something for those individuals who have incurred large legal bills. For, in addition to doing fee bill reviews for corporations and governmental entities, I also do fee bill reviews for individuals.

Legal fees that individuals incur are usually much more modest than those incurred by large corporations. Nevertheless, I have reviewed legal bills for individuals who have incurred in excess of $1 Million in legal fees for probate and estate matters, real property disputes, business deals gone bad and yes, even for divorces.

In this post as well as a follow-up post, I want to discuss the sensitive subject of how to discuss fee bill issues with your lawyer. I say that this is a sensitive subject because I find that while many individual clients are often downright angry about their high fee bills, many are at the same time downright reluctant – even downright fearful – about approaching their lawyer with their concerns about his fee bills.* In some cases, when clients have questioned their legal fees, their lawyers have bristled with some even threatening to withdraw their representation. (More in a subsequent post about what to do if your lawyer threatens to quit if you question her fee bills.)

So for all individual clients out there I will in this post and a subsequent post, provide you with a step-by-step guide on how to go about discussing legal fee billing issues with your lawyer.

Determine the Billing Issues & Your Grounds for Objection

First things first. Prior to discussing fee billing issues with your lawyer, you must be prepared to state specifically what it is you object to or are concerned about (i.e., the billing issues) and why (i.e., the grounds for your objection). In this regard, note that conclusory statements that you feel that the fees are too high are not going to be enough to convince your lawyer or a court. See Zest IP Holdings, LLC v. Implant Direct Mfg., LLC, No. 10-cv-0541-GPC-WVG (S.D. Cal. Dec. 3, 2014)(“[C]onclusory and unsubstantiated objections are insufficient to warrant a reduction in fees.”).

Thus, the first step to take before approaching your lawyer to discuss your concerns about the billed for fees and/or costs is to narrow you focus in on exactly what it is you are objecting to and why.

  • Is it that certain billed for fees or costs do not seem appropriate?
  • Is it that the descriptions of work in the billing entries are not clear?
  • Is it the fact that the total amount exceeded the lawyer’s initial cost estimate?
  • Is it that you question why so many firm attorneys are involved in your matter?
  • Is it a combination of these issues or is it another billing issue?

No matter what the issue or issues are that you have with your lawyer’s billed for fees and/or costs, you must realistically assess whether you have adequate grounds for pursuing any of those issues with the lawyer.   Only after this realistic assessment can you can you decide if there are adequate grounds to approach your lawyer on her legal bills. For just complaining to your lawyer about your legal costs without adequate grounds could unnecessary damage the relationship.

The best way to make sure you know whether or not you do have real issues with regard to your lawyer’s bill is to have your bill or bills reviewed by an experienced legal bill auditor.  Of course, I or my company, LegalBillAudit.com, can perform this service.

At LegalBillAudit.com we offer a free preliminary evaluation on submitted legal bills of $50,000 or more. The reason we do this preliminary evaluation is to see if there is enough in the way of billing irregularities which would justify the cost of a legal bill audit. This is because we have found that although some legal bills seem high, there may be no or only minor billing irregularities. If you are interested in this free preliminary evaluation, you can go to the “request an evaluation” page on our LegalBillAudit.com website and follow the instructions on how to send the bills to us for evaluation.

So much for the infomercial. Now back to how to discuss fee bill issues with your lawyer.

Examine Fee Agreement or Retainer Letter on Fees & Costs

Once you have determined the billing issues and your grounds for objection, you should next look to any fee agreement that you may have signed or engagement letter sent to you or oral representations from your lawyer at the start of the representation on how the lawyer intended to bill you for fees and costs. It could be that what you are now objecting to had been clearly explained and fully understood by you.

Note that I use the terms “clearly explained and fully understood by you” because this is what the ethics of the legal profession require. See ABA Model RPC 1.5(b). Also see Marathon Oil, S.A. v. Morrissey, 982 F.2d 830, 838 (2nd Cir. 1993)(lawyer has burden to establish that fee agreements are “fully known and understood by their clients”).  So if what you are objecting to now was fully explained to your understanding (either in writing or orally) and it is not otherwise unreasonable, you may not have adequate grounds to support what you are now objecting to.

I use the term “not otherwise unreasonable” because it may be that while all the terms of a fee agreement were clearly explained and understood by you, certain terms may have resulted in unreasonable fees being billed. If this occurs, the ethics of the profession do not allow a lawyer to bill unreasonable fees even if the client signed an agreement that permitted it.  See ABA Annotated Model RPC (8th ed. 2015), Comments to RPC 1.5 at p. 82, Client’s  Agreement citing In re Sinnott, 845 A.2d 373 (VT 2004) (“It is unethical for lawyers to charge unreasonable fees even if they are able to find clients who will pay whatever a lawyer’s contract demands.”) Of course, if you have LegalBillAudit.com do a legal bill review, any fee agreement or retainer letter will be examined to determine whether or not it contains any unreasonable terms. 

There are other points to be made about examining a lawyer’s fee agreement or oral representations made about billing for fees and cost to see if it is acceptable or not. (Note to self: write a future blog post on fee agreements.) But for the purposes of discussing fee billing issues with your lawyer, we will just assume that there was nothing in your lawyer’s fee agreement or other communications on how she intended to bill for fees and costs that would affect your ability to raise certain billing issues with her.

In a follow-up post I will go over the other issues come into play when approaching your lawyer on fee billing problems. These issues includes steps you can take at no cost or low cost if your lawyer is unresponsive to your concerns.

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* To read about one client who was not fearful about approaching his lawyers about his high legal bills, see my post entitled “CEO Vows To Fight Back Against Inflated Legal Bills.”

 

 

Sharing Comparative Data on Law Firm Compliance With Company Billing Guidelines

Once upon a time (or about 25 years ago), insurers began to use electronic bill review software to audit their attorneys’ compliance with their billing guidelines. In addition, many insurers established dedicated legal bill review units or used outside legal bill review vendors to audit legal bills.

As audited legal bills started coming back with deductions for numerous violation of insurer litigation and billing guidelines, a positive thing occurred. Attorneys actually began to read their clients’ billing guidelines. And what they found was numerous variations of essentially the same billing rules as well as many vaguely defined guidelines and rules. Continue reading

Lack of “Strategic Focus” A Top Concern in CLM Litigation Management Study

The CLM recently released its third in a series of litigation managements surveys the organization has done over the years. In the 2019 survey, some 80 litigation management executives were surveyed on a variety of litigation related topics. The comments to various questions in the survey revealed a number of interesting findings and concerns.

One of the top concerns expressed by survey participants was a “lack of strategic focus” on the part of outside counsel. Unfortunately, the CLM survey did not define what was meant by it use of the term “strategic focus.” To me, the term means simply an upfront focus on what needs to be done to achieve a favorable result sooner rather than later. Continue reading

Research, Research and Even More Research – Part II

In my previous post, I noted that overbilling for research is regarded as one of the most “egregious” forms of overbilling by law firms. And while I tend to see it more often in larger firms who often view research as training projects for newer associates, I noted that overbilling for research can occur in any size law firm. As to what type of research should be billed to a client, I had noted that case law as well as the ethics of the legal profession provide that “general” or “background” research should not be billed.

In this post, I will cover what research can be billed to a client as well as who should do the research. Finally, I will provide a list of things that should be included in a company’s billing guidelines or a negotiated fee agreement on the subject of research. Continue reading

Research, Research, and More Research – Part I

“One of the most egregious forms of overbilling in many law firms is the almost infinite amount of time that is expended upon research into even the most minute legal issues.”  William G. Ross, The Honest Hour, (Carolina Academic Press) at p. 113.

Have you ever assigned a matter to a lawyer based upon the lawyer’s claimed expertise in the law involved in the matter and then gotten a big bill for research into the same law in which the lawyer had claimed an expertise? If you have, you are not alone.

Overbilling for research is one of the most common issues I come across in legal bill audits. And it seems to be the larger the law firm,  the greater the likelihood there is for overbilling for research. But overbilling for research can occur in any size law firm. Continue reading

For Attorneys Only! How to Avoid Legal Bill Disputes.

As all of my posts to date have been for the benefit of clients of lawyers, I thought it about time to write a post for the benefit of lawyers. And since lawyers like to get paid for their services, what better topic to write about than how to significantly reduce, it not totally avoid, the changes of becoming embroiled in a dispute over your legal bill.

In my CLE seminars on ethical billing practices for attorneys, I give 4 main tips on how to avoid disputes with clients over legal bills. These tips also mirror an attorney’s ethical obligations when it comes to dealing with clients on fee billing. Continue reading