“One of the most egregious forms of overbilling in many law firms is the almost infinite amount of time that is expended upon research into even the most minute legal issues.”  William G. Ross, The Honest Hour, (Carolina Academic Press) at p. 113.

Have you ever assigned a matter to a lawyer based upon the lawyer’s claimed expertise in the law involved in the matter and then gotten a big bill for research into the same law in which the lawyer had claimed an expertise? If you have, you are not alone.

Overbilling for research is one of the most common issues I come across in legal bill audits. And it seems to be the larger the law firm,  the greater the likelihood there is for overbilling for research. But overbilling for research can occur in any size law firm.

Because of the potential for abuse in research in any size law firm, most company litigation or billing guidelines provide that research over a certain length of time (e.g., one hour) be approved in advance.  Beyond that requirement, there is often no or little guidance given on the issues of when there is an actual need for research and who will do the research notwithstanding the size or scope of the legal research project.

As to the actual need to do research, let’s first take the situation where a lawyer who claimed an expertise has actually fudged on that expertise and really does need to do some research on the basic legal issues involved in a matter. In that type of situation, the lawyer should not bill for this research. See New York Assn. for Retarded Children v. Carey, 711 F. 2d 1136 (2nd Cir. 1983)(a lawyer cannot claim an expertise “based on his or her experience, reputation and a presumed familiarity with the applicable law – and then run up an inordinate amount of time researching that same law.”).

In other words, any research needed by the lawyer to “get up to speed” on the underlying legal issues in a matter should be on the lawyer’s nickel. See Planned Parenthood of Central New Jersey  v. The Attorney General of the State of New Jersey, 297 F.3d 253 (3rd Cir. 2007)(third circuit court agreeing with district court below that “the losing party should not be expected to pay for the time a prevailing party spends coming up to speed on an area of law it is unfamiliar with.”).

But rather than seeing a senior lawyer bill for general research on the underlying legal issues involved in a matter, I more often see billing for research on these issues by associates. That is, while the senior lawyer in charge of the case may be knowledgeable about the basic underlying legal issues in a case, less experienced associates who may work on the case often are not and need to be educated on the basic legal issues involved in a case.

To turn young associates loose in the library to educate themselves on the basic legal issues in a particular type of a matter and then bill the client for their “general education” is tempting to do – especially when a deep pocketed corporation or insurance company is paying the bills. But fees associated with education or training of associates are not to be billed. See Annotated Model RPC (8th ed. 2015) Comment to RPC 1.5 at p. 81.  Also 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); Sheila A. by Balloun v. Whiteman, 913 P.2d 181, 259 Kan. 549 (Kan. 1996).

But if background research or general education on the legal issues involved in a case is non-billable, what types of research are billable? I will answer this question as well as give some practical tips on provisions to add in billing guidelines or in negotiated fee agreements when billing for research in my next post.

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Do your billing guidelines (or negotiated fee agreements) accurately reflect what attorneys are required to do when it comes to billing for fees and costs? If not or you are not sure, please contact me at jconlon@legalbillaudit.com for an analysis.