Be Wary of First-of-the-Year Requests for Rate Increases . . . The Rest of the Story

In my previous post, I left hanging the question of how a firm’s charges for fees could increase if you denied the firm’s request to raise their hourly billing rates?  In one word – promotions.

That is, the first of the year is when many associates are promoted to partners. Thus it is that although the associate who was assisting the partner on a matter may still be assisting the same partner in the same manner, he now will do so a much higher billing rate due to the fact that the associate is now a partner.

Of course, who is promoted and when are internal law firm matters that are not subject to discussion with the client, let alone client approval. And that is the way it should be. But what is subject to client discussion as well as approval is how the client’s matter is to be staffed, specifically with regard to the appropriate mix of staff. Continue reading

Be Wary of First-of-the-Year Requests for Rate Increases

Ah, the start of  a new year.  Out with the old and in with the new. And some of the new things you often get at the the start of a year are requests from your attorneys for hourly rate increases.

In a prior blog piece, “A Primer on Increasing Hourly Billing Rates During the Course of a Representation,” I discussed applicable factors that should apply when an attorney notifies a client of a rate increase. Simply put, case law and the ethics of the legal profession dictate that timing of the notice to the client of a rate increase as well as the rate increase itself must be “reasonable.” However, this mainly address those types of situations in which the attorney and client have a written fee agreement whereby the attorney may have a contractual right to increase billing rates from time to time during the course of the representation. Continue reading

Wrap-Up of Series on How RPC Affects Lawyer Billings for Fees

This is my last post in a series of posts on how the how the ABA Model Rule of Prof. Responsibility (RPC) affect what lawyers can and cannot bill for fees. In my first post on the subject, I noted the implicated RPC that are set out in the ABA Ethics Opinion 93-379 (1993) on “Billing for Professional Fees, Disbursements and Other Costs.”  The PRC impacting how lawyers bill include: Continue reading

Liability of Subordinate Attorneys for Supervising Attorneys’ Ethics Violation on Billing

[This is another in a series of blog posts discussing how specific ABA Model Prof. Conduct Rules (RPC) impacts how lawyers can and cannot bill their fees and costs.]

In my last blog post, I discussed the liability of supervising attorneys including managing attorneys and those attorneys on a firm’s management committee for ethics violations of another attorney in the same firm.  In that blog post, I noted that the duty to report the misconduct of another lawyer is set out in RPC 8.3.

Failure to report misconduct of another lawyer can have severe consequences for the non-reporting lawyer who has actual knowledge of the misconduct. See  In re Himmel, 533 N.E.2d 790 (Ill. 1998)(lawyer disbarred for failing to report misconduct of another lawyer). The consequences may seem severe in a different sort of way for associates who work under a supervising lawyer who is ethically challenged when it comes to billing. Continue reading

How One Lawyer’s Violation of the Ethical Rules on Fee Billing Can Affect Others in the Firm

[This is another post in a series of blog posts discussing how specific ABA Model Prof. Conduct Rules (RPC) impacts how lawyers can and cannot bill their fees and costs.]

In all prior posts, I pointed out that violations of the RPC with regard to billing can have consequences for the billing lawyer ranging from a reprimand to disbarment.  See, e.g.,  In re Disciplinary Proceeding against Vanderbeek, 101P.3d 88 (Wash. 2004)(disbarment for bill padding); In the Matter of Jerome Berg, 3 State Bar Ct. Rptr. 725 (Rev. Dept. 1997) (attorney disbarment for unethical billing).

In this blog post,  I wanted to note that RPC violations can also have consequences for supervising attorneys including managing partners, “innocent” partners, and even subordinate attorneys. In my prior on an attorney who billed fake hours, I reported on the case of People v. Mary Jaclyn Cook, 17 PDJ 051(Colo. August 10, 2017). Cook was suspended from the practice of law for, inter alia, preparing to bill time she did not work. Continue reading

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. Continue reading

How ABA Model Rule 1.5 on “Fees” Impacts How Lawyers Can Bill for Their Fees and Costs

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

If you read my first blog piece in this series, you will recall that I noted ABA Ethics Committee Formal Opn. 93-379 (1993) on Billing for Professional Fees, Costs,  Disbursements, and Other Expenses stated that several RPC affect how lawyers ethically can bill for their services. The Opinion specifically mentions RPC 1.1, 1.4, 1.5, 3.2, and 7.1 but notes that other Rules may also be implicated. So far, I have covered each of these RPC (and others) but for RPC 1.5 Fees.

As the name of the rule indicates, RPC 1.5 is all about fees.  RPC 1.5 is broken down in three parts. RPC 1.5(a) provides that a lawyer’s fees and expenses must not be “unreasonable,” RPC 1.5(b) is about a lawyer’s duty to communicate to the client the “scope of the representation and the basis or rate of the fee and expenses,” and RPC 1.5(c) addresses “contingent fee” situations.

I have already covered the duty of communication about fees in my post on RPC 1.4 on “communications.” And as contingent fees are not applicable in fee billing situations, I will devote this post to discussing just RPC 1.5(a).

The term used in RPC 1.5(a) that a lawyer’s fee and expenses not be “unreasonable” has been generally flipped in fee billing cases by courts which always discuss a lawyer’s fee and expenses in terms of whether or not they were “reasonable” rather than unreasonable.

Part RPC 1.5(a) lists 8 factors “to be considered in determining the reasonableness of a fee.” They are: Continue reading