How ABA Model Rule 1.1 on Competence Impacts How Lawyers Can Ethically Bill

[Editor’s note: this is another in a series of blog posts discussing how specific ABA Model Prof. Conduct Rules that all lawyers must follow impacts how lawyers can and cannot bill clients.]

In this blog piece, I will discuss how Rule 1.1 Competence affects how lawyers ethically can bill clients.

Rule 1.1 specifically states that “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”  What Rule 1.1 means in essence is that when agreeing to take on a representation, a lawyer is impliedly – if not actually – making a representation to the client that the lawyer has the basic “legal knowledge” and “skill” necessary to handle the matter.

While issues related to competency can arise in any type of case, they most often arise in non-routine cases. Knowing as I do that most all lawyers hate to turn down business, lawyers often will say that they are competent to take on a case even though they have not handled that specific type of case before.  But if being fully truthful, what they are really saying is that while they believe that they have the “legal skill” to take on the case, they actually lack the “legal knowledge” on the types of issues involved in the case.

The issues most often presented with a lack of “legal knowledge” are billing for excessive research and excessive time for preparation of or revisions of documents.  With regard to research, the ethics of the legal profession are clear.  A lawyer should not charge the client for basic “background research” on the issues involved in a particular type of case. See ABA Annotated Model Rules of Prof. Conduct (7th ed. 2011) at p. 73 citing Attorney Grievance Comm’n v. Manger, 913 A.2d 1 (Md. 2006)(“While it may be appropriate to charge a client for case-specific research  . . . general education or background research should not be charged to the client.”).  Also see New York Assn. for Retarded Children v. Carey, 711 F. 2d 1136 (2nd Cir. 1983) (courts disallowed fees for research into general or basic issues which should be well known to lawyers who claim a competency in a certain practice area).

Unfortunately, I have found over the years that policing the research lawyers do in a case is a pretty hard issue for insurers to effectively do.  For one thing, in looking at the issues researched or the amount of time for the research, e-billing programs many insurers use will only pick up on whether or not a research project over a certain length of time has been approved by an adjuster. And although most company billing guidelines take a pretty firm line on research projects, I have found that many claims adjusters seem to be pretty soft touches in giving authority for research projects requested by attorneys. However, when I observe what I believe to be excessive research – even though it was approved by an adjuster – I always call it to the attention of the manager as a litigation management “training issue.”

The other billing issue most often presented in situations where a lawyer is not experienced in handling the specific types of issues involved in a case is in preparation of documents and especially in revisions to documents.  I have found that taking excessive time to prepare documents and/or taking excessive time to revise documents are often due to the lawyer’s inexperience in handling certain types of cases.

With regard to the point on “inexperience,” the ethics of the legal profession are clear. Lawyers “may not charge clients for time necessitated by their own inexperience.” See ABA Annotated Model Rules of Prof. Conduct (7th ed. 2001) at p. 73 citing   In re Poseidon Pools of Am., Inc. 180 B.R. 718 (Bankr. E.D.N.Y. 1995)(court denying compensation for revising various documents by noting that “a plethora of revisions was necessitated by a level of competency less than that reflected by the Applicant’s billing rates”).

My exerience has been that competency issues typcially arise in two situations. One is in “indepdendent” counsel situations where an insured selects the counsel, ofoten their personal or business attorney. The other is in BIG law firm situations  where the mantra is to feed as many mouths as possible when taking on a representation. Thus much of the work is often shifted to lesser experienced associates who have little to no experience in handling the legal issues involved in a matter.

If you have any questions on competency issues in a matter or on competency in general, please feel free to contact me at jconlon@legalpointsllc.com.

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