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Ethics Byte

Make sure billing practices are bulletproof

By Diane Karpman

Diane KarpmanBilling of clients represents the most constant moral dilemma many of us face. Economist Laurence Summers is reputed to have once advised Sheryl Sandberg, Facebook’s new COO, “to bill like boys.”

I can only speculate as to what that means, but it strongly suggests there may be some gender issues in play in the act of billing. Beyond gender issues, feelings of inadequacy do impact the act of billing clients. Billing is highly subjective and complicated. There are even studies that indicate that depression can have an impact upon billing. Consider:

Many billing issues surround the controversial practice known as “block billing,” which in California is not per se unethical. Block billing, the use of only one total time description for a group of acts, is, however, not a favored practice. (Arbitration Advisory 2003-1, Detecting Attorney Bill Padding).

Basically, that means that each separate task requires a separate detailed description in the final bill. Attorney Gerald F. Phillips, author of “Fair Deal for All Clients,” contends that each phone call requires a note and a description of what was actually discussed.

Importantly, it’s just not the phone call. One must also consider the preparation for the call. Many retainers and engagement agreements spell out a charge of two-tenths of an hourly fee for a phone call of 12 minutes. This is known as a minimum increment. If a high minimum is employed, this can increase the time. Courts have criticized a charge of 25 percent of an hour for a quarter-hour as being too high. Gerry and I do not agree on many aspects of this sensitive subject. If you want to know how a time maven could decimate and destroy your hard-earned fees, you should check out the book for protection.

On a personal level, when I block bill, it saves my clients’ money. They are literally charged more when the time is specifically broken out and delineated. In another  example of a billing quandary, there is a prominent firm in a highly regulated area of the law that is required to charge their carrier clients a fixed minimum increment. If they did not, they would not be paid. On many occasions, they would like the option of charging less, but wouldn’t be paid. Also, nobody is really charging two-tenths of an hour for those “yes or no” emails. You have to be fair.

Contemporaneous time records are more accurate, and represent the best practice, but they are highly unlikely for contingency fee practice. "An attorney's testimony as to the number of hours worked is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records." Steiny & Co. v. California Electric Supply Co. (2000) 79 Cal. App.4th 285. Also, often contingency fee lawyers spend more time on a project, because as investors in their client’s cases, they can and want to guarantee victory.

Here are examples of descriptions deemed by the State Bar’s Committee on Mandatory Fee Arbitration to be inadequate because they did not provide the client with enough information to know what was really going on: “research issues,” “attention to file,” “discovery” and “ prepare for trial.” Billing descriptions are highly circumstantial. When you are sitting in trial with your client for six hours, how much more of a description do they need to give the client?

Billing is a huge headache. I simply want you to be paid in order to continue to provide for your dependents in the lifestyle to which they have grown accustomed. For more information, see my Feb. 9, 2009 article “Avoid Problems When Billing Your Clients.”

Even lawyers have been known to air their griefs for a song … literally. One Texas-based all-lawyer ensemble known as Bar and Grill sings a tune called “Bill Me Anytime,” which explains what clients don’t understand about the billing process. Take two minutes and listen to it. You, too, could be singing a different tune.

Happy Holidays. 

Legal ethics expert Diane Karpman can be contacted at 310 887-3900 or at