Overbilling Attorneys Risk Jail & Attorney Discipline

The lead two stories in the on-line ABA Journal for Sept. 12 show what can sometimes happen to lawyers who overbill their clients.  The lead story was about a partner in a Chicago area law firm who was sentenced to 6 years in prison for billing work that the lawyer did not do.  The other story was about two public defenders (in unrelated cases) in West Virginia who face federal wire fraud charges for billing time for work that they did not do.

In my professional responsibility law practice, I regularly counsel attorneys that there are three things that can get a lawyer into serious trouble with the disciplinary authorities: doing drugs, having sex with a client, or messing with a client’s money.  Thus, it truly escapes me why attorneys take such chances with their careers and, in some cases, their freedom. Continue reading

Clients Pay the Price for Kindergarten Party Caper

By now, if you are an attorney, you may have read about the “kindergarten order” issued by U.S.D.C. Judge Sam Sparks which “invited” two attorneys who had been at odds over alleged overly broad and burdensome discovery issues to a “kindergarten party” in his court. The Order issued by the clearly exasperated Judge told the attorneys to make sure to bring a “sack lunch” and a “toothbrush” to his court in case the party runs late.

When the Order first came out, I got copies from attorney friends in Texas, California, and Ohio.  The Order also made the national legal journals and now all lawyers know.  I would presume the lawyers involved have gotten some good natured ribbing from colleagues who all got a big laugh over this.  I would presume, however, that their clients are not laughing as they are the ones who have to pay for this “party.” Continue reading

Outsourced Legal Work = Outsized Law Firm Profits

A story* in the on-line version of the ABA Journal shed light on a little discussed practice in the law business these days, that of outsourcing legal work to temp or contract employees. The story concerned a client who filed a malpractice suit against a law firm over the quality of the work performed by the contract attorneys that the firm used.

Just like many other business, law firms are looking to save on overhead where they can by outsourcing work and turning to contractors or temp services for virtually everything that can be done by a clerk, legal secretary, paralegal, or lawyer.

I know many insurance defense firms that do not have legal secretaries, but instead use one of the “virtual” secretarial services.   One mid-major law firm in Indianapolis which does a lot insurance work has outsourced their photocopying and document storage and retrieval department.  Although the department is still located in the firm’s offices, the employees are all employees of a vendor.

Of course, a client should not really care that much if a law firm can save money on its overhead by outsourcing or using temps or contract workers instead of firm employees to do secretarial or clerical work.  That is because such work is considered as firm “overhead” and not billable.  So, if a firm can save a buck or two on this type of work, why not?

[A complete copy of this post is available to clients of LegalBillAudit.com. If you are a client and want a copy, please contact clientservices@legalbillaudit.com.]