This week’s not-to-be-missed article on lawyer folly is a jaw dropping round-up of bad billing conduct, as reported in the American Lawyer.
It’s well-known that every jurisdiction’s version of Model Rule 1.5 prohibits charging an unreasonable fee or an unreasonable amount for expenses. So what could lawyers have been thinking when they did things like this:
- Billing a client for time spent showering, because that’s where the lawyer came up with his best ideas;
- Charging a client for lingerie because the lawyer failed to pack enough undies for the duration of a trial;
- Billing the client for a charter jet to send New York lawyers to review documents in Virginia, rather than hopping the shuttle that flew to Virginia every half hour;
- Billing for over 500 hours spent on a matter over the course of 15 days — an average of more than 33 hours per day;
- Billing a Washington, D.C. client for airfare, hotels, meals and travel time to bring in staff from the law firm’s West Coast headquarters — even though the matter was centered in D.C. and the firm had an office in D.C.
These whoppers are items that legal bill auditors have reportedly seen on fee bills, from mainly Am Law 200 firms. Clients are increasingly hiring such auditors, and pushing back on outrageous charges like these.
If you overbill, you can expect more than client push-back. In my home state of Ohio, several cases spotlight the disciplinary trouble that you can get into as well.
See, e.g., Cincinnati Bar Ass’n v. Alsfelder (unreasonable for an attorney to charge a client for “friendly advice” about personal relationships, restaurants and finances; advice was given at social occasions, and was unrelated to client’s legal needs; one year suspension stayed on condition of $30,000 restitution); Disciplinary Counsel v. Hunter (clearly excessive fee resulted from charging attorney rates for picking up mail, depositing checks, paying bills, and arranging for lawn care and house cleaning; disbarment for conduct that also included embezzlement from estate); Dayton Bar Ass’n v. Parisi (billing $13,000 in fees and expenses for overseeing partial restoration of client’s “beloved Jaguar” automobile constituted clearly excessive fee; six month suspension, stayed on condition); Disciplinary Counsel v. Johnson (overworking case and billing $160,000 to collect $197,600 resulted in excessive fee; one year suspension with six months stayed on conditions, including restitution).
The takeaways should be obvious. Be reasonable. Charge an appropriate, honest amount for services, and make sure they are legal services. After all, that’s what we are selling. Avoid folly, and you’ll stay out of disciplinary trouble and stay out of the cross-hairs of billing auditors.