attorney-fees

Red Flags In Legal Bills: Long Work Days

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[The following is an excerpt from my book Red Flags In Legal Bill: What Warning Signals Are Attorneys Sending?]

When discussing larger time charges, there is perhaps no larger time charge that can be made in a legal bill than the total amount of time charged in one 24-hour day. However, believe it or not, I have found some attorneys who have billed for more than 24 hours in one day!

Billing for long work days can be expected in some cases. For example, attorneys occasionally do need to put in long days to prepare properly for a trial or for an arbitration or to respond to some type of emergency situation.  But if an attorney (or paralegal) is billing 8 to 10+ hours a day just doing routine work on a file, this should raise a red flag. 

For one thing, consider that few people can do their best job working 10 to 12 hours a day, day in and day out.  Attorneys and paralegals are no different than anyone else in that regard.  Don’t forget that in addition to billing for 10 to 12 hours, attorneys and paralegals also have to eat, go to the bathroom, answer phone calls, communicate with other staff, and in short, do all the other things that office workers normally do while at the office.  In fact, as I have noted, to generate 8 hours in billing, legal ethicists who have studied the issue say that an attorney or paralegal must spend at least 12 hours or more in the office.

Thus, it is that billing 8 to 10+ hours a day for “routine” work should raise a red flag as it could be a sign of possible bill padding.  This is why whenever I encounter 6 hours or more billed in a day when reviewing a legal bill, my antennae automatically goes up, and I tend to scrutinize the billing entries for that day even more closely, just as courts will do.[1]

But, even if there is no bill padding going on, billing for long work days on routine matters could also point to some other red flag issues.  For example, it could be a sign that the attorney does not have adequate support staff.  In this regard, note that the trend among law firms for some time has been to eliminate support staff.[2] 

Technological advances accounted for the need for less support staff at law firms as well as at many other types of businesses. But some of the work previously done by law firm support staff does not go away because of technological advances. This leaves many attorneys (and paralegals) no choice but to undertake work that was previously done by non-billing support staff, such as copying documents, Bates stamping documents, or making arrangements for a meeting room.  These types of activities still need to be done by someone, and when attorneys or paralegals do the work, they oftentimes try to disguise it as attorney work on the legal bill. For example, an entry by an attorney for “working on exhibits” (without stating what specifically is being done) could mean that the attorney was carefully going through the file to determine which exhibits or use (which would be considered as attorney work), or it could mean that the attorney was Bates stamping or lettering the exhibits (which would be a non-billable clerical task).[3] This is why it is important for every legal bill entry to provide a “sufficient explanation” of what specifically is being done.[4]

Another red flagissue raised by billing for 8 to 10 hours (or in reality, for a 12 to 15-hour work day) is that it could be a sign that the attorney has taken on too much work.  In addition to laying off support staff to increase their profits, many law firms have also laid off marginally productive attorneys as well. So, it could well be that an attorney has taken on the work of departed attorneys forcing the attorney to cram all of his work into long work days.

But for whatever the cause or reason, working long work days on routine matters is not an efficient way to work and could likely lead to mistakes.  For even if an attorney is actually working a 12-hour day (to able to generate 8 hours worth of billing time), do you really think the attorney is doing his best work on a matter at 8:30 p.m. at the end of a very long work day?  Thus, if you encounter an attorney billing for 8 to 10 hours a day on a regular basis, it might be time to have a heart-to-heart talk with the attorney or consider whether your matter needs to be transferred to another attorney.

[1] See, e.g., Ramos v. Lamm, 713 S.2d 546 (10th Cir. 1983)(Court agreed with studies that show that normally there are “six to seven billable hours per day for a five day week.  . . . The court should question reported time significantly in excess of the norm.”).

[2] See ALM LAW.com, Jan. 22, 2009 (reporting on support staff cuts at Ice Miller, “Ice Miller is hardly the only firm trimming support staff in recent months.  Last week, Akin Gump Strauss Hauer & Feld slashed 65 support staff positions across its U.S. offices, and Dechert, Reed Smith and White & Case are among the law firms that have cut a significant number of staffers in recent months.”).

[3] See Ceres Envtl. Servs. v. Colonel McCrary Trucking, LLC, No. 11-12787, 2012 U.S. App. LEXIS 8271, at *11 (11th Cir. Apr. 25, 2012)(court finding “purely clerical tasks” such tasks as “bates labeling of documents”).

[4] I devote a chapter to the importance of sufficiently explained legal bill entries in my book, How to Review Legal Bills Like a Pro.

What A Lawyer Must Do To Increase Hourly Billing Rates Or Modify A Fee Agreement

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Invariably, when a legal matter has continued for some time, there is an increase hourly billing rates over what was disclosed in the original Fee agreement. Sometimes, though, there are more substantive changes or modifications to the original Fee Agreement.

In this segment from my book, The Art Of Hiring The Right Lawyer & Negotiating A Fee Agreement That Will Save On Legal Costs, I discuss what lawyers must do to be able to increase their hourly billing rates or make any substantive change to the original Fee Agreement.

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Subsequent Modifications to the Fee Agreement

While discussing modifications to a proposed fee agreement, it is important to also discuss those modifications that are made to a fee agreement during the course of a representation.

Some modifications to an attorney fee agreement may be needed during the course of the representation because the objective (that is, the scope) of the representation has changed. Or perhaps costs have become a major concern and a less costly approach is needed. Or the modification could be for some other minor reasons related to something specifically stated in the agreement, such as the names of the attorneys involved in the matter. But whatever the reason for the modification, if it relates to an issue discussed in this book, a reference back to that issue as discussed should be made prior to agreeing to the modification.

Although some modifications to a fee agreement may be necessary, I have observed that most modifications made during the course of the representation occur for the attorney’s own benefit and usually because the attorney is trying to increase his compensation. For example, the attorney may want to convert an hourly fee agreement into a contingency fee agreement because the lawyer thinks he will be able to earn a larger fee that way. Or the change may involve increasing the percentage amount of a contingency fee. But for whatever reason, if an attorney is in any way seeking to modify the fee agreement for his benefit, the attorney needs to get the client’s permission to the modification.[1] That is, it cannot be a unilateral change. And to get the client’s permission to make a modification of a fee agreement enforceable to increase compensation, the lawyer must follow a strict process set out in RPC 1.8, which governs “business transactions” with a client.[2]  

One of the things that RPC 1.8 requires a lawyer to do is to advise the client in writing “of the desirability of seeking . . . the advice of independent legal counsel.”[3] Also, the lawyer must get the client’s “informed consent” to the proposed business transaction (that is, to the modification of the fee agreement to the lawyer’s benefit).[4] Getting “informed consent” from a client is an involved process that I will discuss in detail in Chapter 10. For now, I will simply say that getting a client’s informed consent is a big deal that attorneys do not at all like to go through.

Of course, it might be said that regular hourly fee increases that typically occur on an annual basis during the course of a representation are modifications to the original fee agreement to an attorney’s benefit. But, such increases are exempt from the application of RPC 1.8 so long as any increase is “reasonable,” and the client was notified prior to the increase taking effect.[5]

To address the issue of notification of fee rate increases, there is usually a sentence buried in the original attorney fee agreement notifying the client to the effect that “we may raise our hourly billing rates from time to time.” And some lawyers believe this language, along with the client’s signature at the bottom of the fee agreement, means that the client has given the lawyer blanket approval to increase hourly billing rates whenever the lawyer wants to do so without first notifying the client of the increase.

However, just informing the client that the lawyer may increase his hourly billing rates at some time in the future is not at all the same thing as notifying the client prior to actually raising the hourly billing rates or changing them from what was originally agreed on in the attorney fee agreement.

In my experience, though, despite whatever language there is or is not in a fee agreement about increasing hourly rates during the course of the representation, most lawyers do give clients notice and get their permission prior to implementing any rate increases. So, most of the time, this is not going to be an issue. But just to ensure that this does not become an issue, in Chapter 6 I included some recommended language to address this when discussing hourly billing rates.

[1] See ABA Annotated Model Rules of Professional Conduct (7th ed. 2011), Comments to RPC 1.5 at p. 80, Modification of Agreements (“Modification of a fee agreement to a lawyer’s benefit during a representation is generally impermissible as well as unenforceable.”).

[2] See ABA Annotated Model Rules of Professional Conduct (9th ed. 2019), Comments to RPC 1.8 at p. 170, Changing Fee Agreements (“Although Rule 1.8(a) does not apply to ordinary client–lawyer fee agreements, it has been applied to efforts to modify an agreement during the course of the representation.”) citing, inter alia, In re Curry, 16 So. 3d 1139 (La. 2009)(inserting more favorable terms into original agreement violated rule) and Restatement Third of the Law Governing Lawyers, §18(1)(a) (2000) (client may avoid modification unless lawyer shows modification fair and reasonable to client).

[3] See RPC 1.8(a)(2).

[4] See RPC 1.8(a)(3).

[5] See ABA Standing Committee on Ethics and Professional Responsibility Opinion 11-458 (2011) Changing Fee Arrangements during Representation at p. 3 (“[T]he client’s acceptance of a modified fee arrangement may be inferred from the circumstances. For example, many lawyers who bill for their services on an hourly basis routinely increase their “normal” or “regular” hourly billing rates incrementally from time to time.” citing Severson & Werson v. Bolinger, 235 Cal. App. 3d 1569, 1570 (1991) (law firm cannot raise its “regular hourly rates” without first notifying client)).