More and more, institutional legal clients who work with outside lawyers on a regular basis are creating and instituting billing guideline agreements that any lawyer or law firm will have to follow if they want to get repeat business or simply get their bills paid on time. Many of these billing guidelines documents look eerily similar, and that is no accident as there is a cottage industry of consultants who work with institutional clients to lower their legal bills and turn the tables on outside counsel in negotiations. And whether or not your client has such a legal billing guideline document in place, it is common for all kinds of clients to push back on legal bills based on the same types of issues. Here are five of the more common issues that clients raise over legal bills in disputes over payment.
More than One Attorney at a Deposition or Other Meeting
You might have very good reason for having more than one attorney or other legal professional attend a deposition, meeting with opposing counsel, witness prep, and so on. Simply having one lawyer who can listen, analyze, and take important notes while the other lawyer conducts the meeting often makes sense as a structure to fit the client’s needs. But when that client sees two attorneys billing for the same meeting, they can argue that the work was redundant.
Best to make sure that you agree ahead of time with the client and make them aware of the need for multiple timekeepers. In addition, have the various attorneys’ create time entries which reflect the unique tasks they were completing and hence the justification for their attendance.
“Block Billing”
It used to be general practice for an attorney to submit an invoice with entries that contained multiple tasks corresponding to a single span of time, such as:
2.5 hours – Review documents in preparation of call with opposing counsel; Speak by phone with opposing counsel; Draft memo to partner; Conduct follow-up call with client
Nowadays, clients want to see all four of those entries broken out into individual time entries. This is of course slightly more work for you, but you do not want the whole entry to be disputed.
Attorneys Conducting Research on Issues That Should Be Known
Many billing guideline documents indicate that a client will refuse to pay for legal research into legal issues that should be well-known to an attorney working in that practice area and in that particular jurisdiction. Of course, determining what specific type of research is billable and what is not will be a complicated matter for you and the client to discuss, but it is an important issue to keep in mind.
Administrative Tasks as Opposed to Legal Tasks
This one has been around for a long time: clients only want to see billable tasks that reflect your firm’s legal skills, not your skills at making copies, filing documents, assembling bills, and other types of tasks that a legal secretary could conceivably do. Make sure that you are delegating the tasks you can delegate and/or using your time entries to accurately reflect the legal skills that were necessary to complete your billable tasks.
Junior Work Done at Senior Billing Rates
In most firms, senior attorneys are billed out at higher hourly rates than junior attorneys, and clients want to see tasks being performed in the most efficient manner possible for them: if a $150/hour associate can draft a client update in the same time and at roughly the same skill level as a $450/hour partner, then the client will not want to pay three times the amount for the same result.
Again, make sure that you are delegating tasks as needed to junior timekeepers and/or making sure your time entries reflect the justification for a higher-rate, more senior timekeeper doing the task instead.
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