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 they include in their fee bills 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 they are actually putting into the file. (I also suggest that they actually look over their bills before they go out to clients! This is because I often see grammatical and other glaring mistakes in bills.)
But I do find that writing off time to review a subordinate’s work is unusual. This is because I mostly see attorneys billing their full time spent on reviewing and/or revising the work of subordinate staff. However, unless the attorney is actually signing a document being prepared by a subordinate (including both attorneys and paralegals), none of the time spent to review the document prepared by the subordinate should be billed.
The reason attorneys should not bill for review of subordinate staff work is beause it is considered as non-billable attorney “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 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).).
However, if a subordinate prepares a document for the attorney to sign, a reasonable amount review time should be considered a permissible billing activity. But what should be considered a “reasonable amount of review time?” Generally, it should mean that amount of time it would take to read over and sign the document.
Any time spent to “revise” a document prepared by a subordinate 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 spent .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: that the original draft was a non-competent or sub-standard work product.
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 an attorney is repeatedly billing for reviewing and revising a subordinate’s work product? Even if the attorney is billing “N/C,” this still would raise troubling issues. It would raise the issues of whether the subordinate is not competent enough or is just too inexperienced to be working on the matter.
When reviewing non-panel or independent counsel legal bills, I am always on heightened alert for billing entries for review and/or revision of work prepared by the attorney herself, by subordinate staff, or even by other peer attorneys. 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 ).
One of the main reasons I am on alert to these issues is that I have found that non-panel and independent counsel or their staff often lack sufficient expertise or experience to handle the matter which invariably leads to excessive reviews and revisions. When I see this occurring, I always alert the case manager. This is because my experience has been that a lack of expertise and/or experience extends beyond standard billing issues and can wind up having a big impact on the ultimate outcome of a case.
Because of my expertise in reviewing non-panel or independent counsel legal bills, many insurers – even those with their own legal bill review units – have called upon me to review their troublesome non-panel or independent counsel legal bills. For review of non-panel or independent legal bills, please contact me at firstname.lastname@example.org.