The Consequences for Attorneys Who “Knowingly” or “Negligently” Engage in Improper Billing

[Editor’s note: this is another in a series of blog posts addressing specific ABA Model Rules of Prof. Conduct (RPC) that impact how lawyers can and cannot bill clients.]

In my last blog post, I discussed the case of People v. Mary Jaclyn Cook, 17 PDJ 051(Colo. August 10, 2017) in which a lawyer got suspended from the practice of law for just preparing to send out legal bills with false billing entries and then initially lying about it to her supervisors. The case opinion noted that the lawyer had violated several of the RPC.

Before continuing with my series of posts on how the RPC impact how lawyers can and cannot bill clients, I thought that in light of the Cook   case it might be good to pause and discuss the consequences to attorneys for violating the RPC when it comes to billing for fees and costs.

But before discussing consequences, let’s discuss a misconception of many attorneys that the RPC only apply to how they bill their clients. No less an authority than the U.S. Supreme Court has held that ethics in fee billing apply not only in situations involving the client, but also in situations involving the client’s adversary. See Hensley v. Eckerhart, 461 U.S. 424 (1983)(“Hours that are not properly billed to one’s client also are not properly billed to one’s adversary.” citing Copeland v. Marshall, 205 U. S. App. D. C. 390, 401, 641 F. 2d 880, 891 (1980) (en banc) (emphasis in original).).

And for those Cumis or Peppers or independent counsel do not think that the same ethics they must follow when billing clients do not apply or apply differently when they bill insurers, they may want to read Center Foundation v. Chicago Insurance Co., 227 Cal.App. 3d 547, 560 (2nd Dist. 1991)(court holding that Cumis counsel must engage in “… ethical billing practices susceptible to review at a standard stricter than that of the marketplace.”). They may also want to read In Re Jerome Berg, 3 State Bar Ct. Rptr. 725 (Rev. Dept. 1997) (attorney disbarment wherein independent counsel held responsible for unethical billing to insurance companies).

In short, the RPC apply all the time to all situations in which an attorney may bill fees and costs.  Also, nowhere in the  RPC does it say that the rules are different for patent lawyers or real estate lawyers or environmental lawyers. The RPC apply with equal force in all types of billing situations.

And now for the consequences of improper billing . . .

[A complete copy of this blog post is available to clients of LegalBillAudit.com. To obtain a copy, contact clientservices@legalbillaudit.com.]

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