The Three R’s of Reasonableness of Legal Bill Review

In my last blog post on how the ABA Model Rules of Prof. Conduct (RPC) affect how lawyers can bill for their fees and costs, I noted that RPC 1.5 mandates that fees and costs be “reasonable.” I also noted my belief that all different factors courts use to determine reasonableness can be put into three categories.

Those three categories are:

  • The reasonableness of the “task” performed
  • The reasonableness of the ”person” performing the task
  • The reasonableness of the ”time” spent performing the task

In my seminars on How to Review Legal Bills Like a Pro©, I often ask participants what do they look for first when they review a legal bill. Many times the answer back is they look first at the time billed for the tasks. However, that is the last thing that should be looked at when reviewing a legal bill.

To properly review a legal bill (and save time), it is important to look first at the reasonableness of the “task” preformed. If the task is not appropriate or reasonable, then it is irrelevant and pointless to further examine the tasks to determine the reasonableness of who performed the tasks or the reasonableness of the time spent performing the tasks.

For example, if a task is a “clerical” task, it makes no difference who performed the task or how much time it took. This would be so even if an attorney performed the task. See Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)(“The value of a service is not enhanced just because lawyer does it.”).

If it is determined that a task is reasonable or appropriate to do or bill for, then the next thing to look at is the person performing the task. For even though the task itself may be reasonable, the person performing the task may be unreasonable.

For example, a partner may be doing a task that an associate could have done or an associate may be doing a task that a paralegal could have done. In such situations, the billing rates should be adjusted appropriately. See Klimbach v. Spherion Corp., 467 F.Supp.2d 323, 332 (W.D.N.Y. 2006)(“The tasks performed by a partner that should have been performed by either an associate or paralegal will be charged at the proper associate ($180) and/or paralegal ($95) rate. In addition, any tasks performed by an associate that could have been performed by a paralegal will be charged at the hourly rate of $95.”).

Finally, after determining the reasonableness of task and then the reasonableness of the person performing the task is it appropriate to review for the reasonableness of the time billed for the task.

Of course, reviewing legal bills for the reasonableness of the task and the person performing the task are relatively easy to do when compared with reviewing the time billed to perform the task. Lists of tasks that are billable or non-billable as well as lists of tasks that should be performed by a partner or an associate or a paralegal can be easily compiled for reference. But, it is not so easy to compile a list of how much time it should take to perform tasks.

But instead of spending time trying to compile a list of permissible time to perform tasks, it may be better to apply some basic “rules of thumb” to how much time is should take to perform certain tasks. I have provided some basic rules of thumb in a prior blog post.

Of course, determining how long any task should take is more art than science when it comes to reviewing billing entries. I have trained both file handlers as well as legal bill review units at insurers and other types of companies on this as well as other legal bill review issues. If you are interested in legal bill review training that can be tailored to the needs of your staff, please contact me at jconlon@legalbillaudit.com.

 

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