Five things to notice in your lawyer's bill
A recent article, “Overbilled by your lawyer? You are not alone,” told the story of a lawyer whose firm touted expertise that she didn't have and billed for time that she didn't work. That story led to an e-mail captioned BRAVO from Professor Nancy B. Rapoport, of William S. Boyd School of Law, University of Nevada, Las Vegas.
Collaborating with Joseph Tiano, founder and CEO of Legal Decoder, a legal analytics company, the pair have written extensively about the reasonableness of attorney fees as well as on using time entries to predict risk factors for legal malpractice.
“Your story is a client's nightmare,” Professor Rapoport observes, “but most lawyers do their best to serve their clients fairly and do not engage in that type of unethical behavior.”
They listed five things clients need to carefully notice about any bill and what to do when something appears to be not right.
Rapoport: 1. Did the right level of professional work on your matter?
The retainer agreement, the contract that you sign with the law firm, will state who is going to work on the case. For smallersized matters, this usually means one lawyer. For larger cases, there could be several lawyers and paralegals. Generally, each of those people has an hourly rate, unless you signed up for a fixed rate or other alternative billing arrangements.
Partners are the most expensive, while paralegals are the least expensive. Not every task has to be performed by the highest-billing person in the firm. Make sure that what's done is performed efficiently by the person with the right skill level. Partners don't need to be doing basic legal research, and associates (newer lawyers) don't need to be the ones drafting complicated documents from scratch. Read the time entries and get a feel for who did what for you.
Tiano: 2. How many people in the office worked on your documents or appeared in court?
In larger matters, there's a tendency for many lawyers to handle a document: often far too many than can be justified. Or maybe there's a big hearing coming up in your case. How many people attended? One? Two? Ten? There should be a unique reason for each person “touching” your matter to add input or expertise. Don't be afraid to ask what each person contributed, because all of those people are “contributing” time at their individual hourly rates.
Rapoport: 3. How specific are the descriptions in the time entries on your bill?
Clients are entitled to know who did what, and how long that “what” took. If someone just “worked on” your matter, you can't possibly know what was done. Did they draft something? Edit something? Negotiate
something? “Worked on” and “attention to” are meaningless phrases. Make your lawyers use verbs that tell exactly what they did so that you can evaluate the reasonableness of the fees.
Every state has an ethics rule that requires attorney fees to be reasonable, so before you can decide if the fees are reasonable, you need to know what the lawyer(s) really did.
Tiano: 4. Did those entries break down the time spent on each task?
How much time did each task take? If you see “prepare for and attend,” or the like, ask, “How long did the preparation take? How long were you there?” If lawyers are lumping those together, you have no way to evaluate if too much time, or too little, or just enough, the lawyer spent on “preparing” versus “attending.”
When judges review legal fees, they typically won't let a law firm “lump” those fees together (a bad habit also known as block-billing). You shouldn't, either, and if the law firm can't recall how long each sub-item took, ask for a discount. It's the lawyer's job to tell you what was done, so any mistakes or ambiguities should be borne by the lawyer and not you.
Rapoport: 5. Did the law firm use artificial intelligence to speed up routine tasks?
AI can be designed to automate certain routine tasks and to speed up other, less routine tasks. But at the end of the day, a lawyer must be responsible for the work product generated by AI.
When AI goes wrong, “hallucinations” (wildly incorrect results) can occur, and only a trained eye will be able to spot it. Lawyers must embrace technology that lets them spend less time on things that computers do better than humans do so that the lawyers can devote more time on the things that only humans do well.
If you see a time entry that indicates that an associate has spent days looking for a particular type of clause in a contract, ask, “Why didn't your firm use AI, which would have found that clause faster?” And then ask for a discount.
Concluding our interview, both attorneys suggested that we recall our days in high school geometry when we had to “show our work.”
“Requiring lawyers to show theirs is just plain common sense,” Rapoport said, “and in so doing, you're more likely to be paying a reasonable bill.”