In its model litigation guidelines, the CLM recommends paying attorneys at only 1/2 their hourly rate for any travel time. Many companies have either adopted this specific recommendation or pay attorneys for travel time at a reduced rate.
Not unpredictably, many attorneys have complained about the reduced compensation for travel time. Their argument goes that if they were not traveling for the client at a reduced hourly rate, they would be in their office billing other clients at their full hourly rate.
On the surface, one would think that attorneys have a valid argument. However, a little digging below the survey reveals that their argument is not at all valid.
In a post last year entitled “The ‘Does Anyone Have a Form That I Could Use’ Practice Section,” I let you in on one of the legal profession’s little secrets: an awful lot of legal work is done using forms and recyled work product. Now, I am going to let you in on another little secret: attorneys can make more money when traveling at a reduced hourly rate than than they do when they bill at their full rate for work done in their office.
Here’s how they do it.
Legal ethics experts agree that at most, attorneys can only bill 2 hours for every 3 hours they spend in their office.* This “3/2 billing rule” takes into account the fact that attorneys do not spend every minute they are in their office billing clients. They must take breaks, go to the restroom, eat lunch, engage in social conversations with staff, etc. These are the same things they do when they travel on your cases.
This is why it is can be said that all attorneys (with no exceptions) make more money when they travel at their full hourly than they would for the same time by staying in their office. Not only that, but many attorneys view travel time as an opportunity to make even more money. Many attorneys view travel time (especially in their car) as time when they can return phone calls to other clients, call prospective clients, or discuss work other cases with their staff. (This is also politely called “double billing.”)
Adding up all the facts in the matter, it should come as no surprise that many companies have made the decision to amend their billing guidelines to provide that they will only pay attorneys at a reduced hourly billing rate for travel time. What is surprising is that many attorneys who complain about only being allowed to bill travel time at a reduced hourly rate can still make more money when they travel than they would sitting in their office for the same time billing at their full rate.
* See, e.g., Gerald F. Phillips, The Rules of Prof. Conduct Should Provide Guidance to Attorneys with Respect to Billing Clients,15 ABA Prof. Lawyer 1 (Spring 2004) (“[T]he general rule of thumb for billing hours is that a lawyer must spend three hours in the office for every two that are billable.”).