What Clients Should Know About How Attorney Ethical Rules Impact Billing for Legal Fees & Costs

May 4, 2017

If you were to ask a group of lawyers to name an ethical rule that applies to billing for fees, I would suspect at least 90% would name Rule 1.5 Fees – probably because it is the only ethical rule that has the word “fees” in the title!

Now ask those same lawyers to name other ethical rules that may also apply to fee billing and you would probably get mostly puzzled looks. For based upon my own experience in counseling scores of lawyers over the years on ethical issues involved in fee billing, I doubt that 1 in 100 lawyers could correctly name  another ethical rule, let alone several other ethical rules, that might also apply to their billing for fees and costs.

So what are the other attorney ethical rules that apply to billing for fees and costs? Most can be found in ABA Standing Comm. On Ethics and Prof. Resp., Formal Op. 93-379 (1993) “Billing for Professional Fees, Disbursements and Other Costs.” The Opinion discusses the various Rules of Prof. Conduct (RPC) that govern all attorney conduct and may be implicated in legal billing. They include among others, Read the rest of this entry »

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A Primer on Increasing Hourly Billing Rates During the Course of a Representation

April 12, 2017

If you recently have had any of your attorneys ask for a 5% increase in their billing rates you might want to refer them to Judge Richard Posner’s recent decision in Prather v. Sun Life . In that case, he found a 5% increase in billing rate to be “excessive!”

Just for kicks, I encourage you to read Judge Posner’s entire opinion in the Prather case. The Judge is well known for his often thought provoking opinions and statements on a wide variety of subjects. He also sometimes has an entertaining tongue-in-cheek way of presenting his opinions and Prather is an example of this.

But back to the subject of increases in billing rates. I often come across this issue in reviewing legal bills in cases or other legal matters which drag on for years. So I thought it time to set out some basic facts on the subject. Read the rest of this entry »


CLM Advisors’ “Snapshot” is Interesting Picture on Use of Third-Party Legal Bill Review Vendors

March 10, 2017

CLM Advisors periodically conducts informal surveys of industry executives to capture how industry executives feel about different litigation and claim strategies. These results of these informal CLM Advisors surveys are compiled into a “snapshot.” Unlike CLM Advisors more formal in-depth “studies,” snapshots are intended to be more informal, point-in-time, “State of the Unions” on particular important aspects of the insurance industry.

With an end view of compiling a snapshot on the state of the use or non-use of third-party legal bill review (LBR) vendors in the insurance industry, CLM Advisors recently surveyed some 125 senior litigation and claims officers. The results of this survey presented an interesting picture on the “State of the Union” on the use of third-party legal bill review vendors in the industry.

But before getting into this Statue of the Union, a brief review of the history of the third-party legal bill review industry may be in order. Read the rest of this entry »


E-Filing is So Easy That Even a Lawyer Can Do It.

January 11, 2017

Electronic filing (e-filing) of documents with state courts  is sweeping the country. If it is not yet in your state, chances are that it will be soon. Here is a list of the status of e-filing in state courts in the states.

Preceding the implementation of e-filing programs, seminars and written material have been provided to lawyers and their staffs on how to use the e-filing system in their jurisdictions. Having attended some of those seminars, I can attest to the fact that e-filing is so easy that even lawyers can do it.

And judging from the time entries in legal bills that I review, many lawyers have begun to e-file their own documents instead of having the legal secretaries or assistants do it for them. Thus, the question: will attorney e-filing of their own documents eventually lead to another round of support staff layoffs like we experienced during the Great Recession? Read the rest of this entry »


Why Legal Fee Dispute Case Law Does Not Change

November 29, 2016

Whenever I make a deduction in a legal bill, I set out a reason for making the deduction.  Usually the reason I set out is grounded in an ethics rule or in well settled case law. And it is not unusual that the case I cite to is 20 or 30 years or more old.  As a result, I have been asked why I do not cite to more recent cases. One of the main reasons I generally give for not citing to more recent case law is that that often there is no more recent case law. Also the case law does not change in this area.

One of the older cases I frequently cite to is Hensley v. Eckerhart, 461 U.S. 424 (1983). Hensley is considered to be the seminal case in attorney fee dispute cases on a number of issues including the burden of proof on an attorney seeking fees in a fee dispute case (prove and establish the reasonableness of each dollar, each hour, above zero”).  Since Hensley was decided in 1983, it has been cited to in 12,487 cases involving fee disputes. That’s 31 cases a month or 1 case every day for the past 33 years including the latest case, Blake v. New York City Health and Hospitals Corp., 110316 NYSDC, 14 Civ. 23340 (JGK)(S.D. N.Y. Nov. 3, 2016).

Another big reason that the case law on legal fee disputes does not change is that unlike tort law that may be “evolving,” legal fee dispute case law stays the same. And unlike some tort law that may be different from jurisdiction to jurisdiction, legal fee dispute case law does not shift from jurisdiction to jurisdiction. As a result, there are very few, if any, splits of authority or “minority” views on legal fee dispute issues.

This main reason for all of this uniformity in fee bill dispute law is that courts basically are applying ABA Model Rule 1.5 (Fees). Read the rest of this entry »


Court Zingers in Legal Billing Cases

July 21, 2016

Over the years, I have read hundreds of cases from throughout the U.S. involving fee billing issues.  From these cases, I have extracted key holdings that I often rely on in making decisions on whether certain billing entries should be reduced or eliminated.

As with most all cases, the holdings in cases on fee billing issues are often very dry. And just like in other cases, courts in fee billing cases sometime get in a good dig or have a pithy way of putting across their point or sending a clear signal to the attorneys seeking approval of their fees that they are on to their games.

Here are some examples. Read the rest of this entry »


Soaring Out of Sight: Billing Rates Climb To $2,000 an Hour at Some BIG Law Firms

June 22, 2016

story in the February 9 Wall Street Journal reported that billing rates at some BIG law firms had risen $1,500 an hour despite weak demand and low inflation. Now, according to a study published in May by BTI Consulting Group, the top rate at some BIG law firms has risen to $2,000 an hour.

It seem like it was only yesterday (actually it was 5 years ago) that I posted two pieces on lawyers at BIG law firms that were charging $1,000 an hour. In one blog post, I wondered why it was that some corporations were willing to pay such high hourly rates when very good lawyers at much lower billing rates were readily available.

I answered that question in a follow-up blog post when I reported that an expert who regularly consults with big corporations told me that big corporations actually view lower billing rates at a firm as a negative. Apparently very good $500 an hour lawyers are not looked at in the same favorable way that mediocre $1,000 lawyers are simply based upon their hourly billing rates. For more insight on this issue, you might want to read my blog post entitled “Why Corporate Lawyers are From Mars and Claims Managers are From Earth.”

Of course, as I have warned many times in the past in this blog, BIG law firms and overbilling go hand-in-hand. This is why  in a post entitled “Getting Caught up in BIG Law Firm’s Protocol,” I warned against ever, ever, ever hiring a BIG law firm to do what a smaller law firm can also do. This is because my experience has taught me that BIG law firms are  the worst of the worst when it comes to overbilling clients.

Over the years, I have reviewed legal bills from thousands of law firms throughout the U.S. involving every type of legal matter imaginable. Invariably whenever I have reviewed legal bills from BIG law firms, the results are the same. BIG law firms always overstaff, overwork, overbill, and most importantly, they tend to overlook any real opportunities to quickly and efficiently resolve a matter for a client.

And I am not the only one who believes this. I have heard this time and again from other lawyers – especially those lawyers who have taken on clients that were the subject of abusive billing by BIG law firms. To illustrate my point, in a recent post on a state bar listserve I belong to an attorney was seeking help for a potential client who had left a very large law firm because he was tired of being overbilled by multiple attorneys who were doing the same work and not getting anywhere.

So if you have a friend who is thinking about hiring a BIG law firm – no matter how big or serious the matter is – don’t let her do it! Warn her that she is likely not only letting herself in for overstaffing and overbilling, but very likely for an unsatisfactory result as well.

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If you have questions on legal bills from BIG law firms, please feel free to contact me for answers at jconlon@legalpointsllc.com. Dealing with BIG law firm invoices is my specialty.