$112.50 to prepare a client’s invoice? Anecdotally, I’ve heard of lawyers charging clients for the time it takes to prepare a client’s bill. But from a client’s perspective, it’s a practice almost guaranteed to piss off a client. The only thing worse would be the lawyer who then charges the client when she calls for an explanation of the bill.1
Back in the olden days, lawyers, particularly the silk-stocking Big Law set may have arguably had a cricket’s crack of justification. In those days, big firms used pencils, prayer beads and abacuses to track hours on written daily time sheets. Accounting departments compiled the time sheets and produced pre-bills for partners to sprinkle with holy water before producing a final bill. That old-fashioned process took time and a lot of holy water.
But too bad for law firms big and small that still want to charge for preparing a bill. For almost 20 years now, lawyers have been able to use timekeeping and billing software to efficiently produce invoices in mere minutes.
Not to say that improved timekeeping and bill preparation necessarily means lower client invoices. After all, lawyers, myself included, are known to invoke the oft-quoted and genuflected Abe Lincoln maxim, “A lawyer’s time and advice are his stock in trade.”
But billing time notwithstanding, it’s not always time and advice lawyers sell to their clients. As Am Law Daily noted in the bankruptcy case of dog-killing pro footballer Michael Vick, his law firm invoiced him for $2.6 million in fees and expenses for 7,200 billable hours of work over ten months. The bill, however, also included the cost of running air conditioning during the weekend; taxi rides home for employees working late; and $1,200 for plane tickets from New York to Kansas. A judge subsequently reduced the bill.
Client push-back and ethical duty.
After a decade of flat wage growth; economic retreat and growing income inequality, consumers are increasingly price and value conscious. Lawyers also face ongoing competitive pressures from brick-and-mortar and online non-lawyer legal services providers.
Forget the arrogant nonsense that clients still have an expectation of getting hosed by their lawyers. Even if clients ever had that expectation, they certainly were never happy about it. When it comes to today’s practice of law, there’s more and more client push-back on fees and greater scrutiny on billing. I think this is a good thing.
As I’ve posted before here and here, when it comes to the reasonableness of attorney’s fees it’s like beauty — in the eye of the beholder. And this even when lawyers are supposed to be ethically guided by objective reasonableness standards under Ethical Rule 1.5.
Yet it’s really not that hard. First, a written attorney-client fee agreement is essential although as most lawyers know, it’s not necessarily the final word. Second, tow the line on the professional duty that lawyers owe their clients, which is to advance the client’s interest under the limits set by law.
As Kathryn Thompson further explains at “Let’s be Reasonable” in The ABA Journal, “A breakdown in the lawyer-client relationship that culminates in the lawyer withdrawing or being discharged frequently sets the stage for violations of Rule 1.5. Lawyers often run afoul of the rule’s reasonableness requirement in the process of terminating the relationship or when defending against disciplinary complaints by the client. In both situations, lawyers sometimes fall into the trap of improperly billing for activities that advance their own interests rather than fulfill their obligation to the client.”
Not often and not always, lawyers do get disciplined for ethics violations involving improper billing practices. For example, Kathryn Thompson also mentions the Indiana lawyer whose suspension was upheld by the state supreme court for among other things, billing his client for time spent reading the client’s representation termination letter and for then billing the client for post-termination work. See Matter of Comstock.
So in the context of billing clients, the better ethical posture is to always ask whether or not the fees charged were reasonably expended to advance the client’s interest — not the lawyer’s. By that measure, weekend air conditioning, taxi rides and bill preparation shouldn’t pass muster.
 And then there’s the worn-out lawyer joke about the new client who comes to see the lawyer. “Can you tell me how much you charge?”, asks the client. “Of course”, the lawyer replies, “I charge $300 to answer three questions!” “Well that’s a bit steep, isn’t it?” “Yes it is”, says the lawyer, “And what’s your third question?”
Photo Credits: Photos from Morguefile.com, no attribution required.