Perfecting the Tenth: Best Practices in Billing, 1116 COBJ, Vol. 45 No. 11 Pg. 85
| Author | Heather Kelly, Ed Hafer, J. |
Heather Kelly, Ed Hafer, J.
Whoops-Legal Malpractice Prevention
Many lawyers bill by the tenth of an hour. That amounts to approximately 16,000 to 20,000 tenths a year. In a long career, the total number of tenths billed by a lawyer may approach one million.
Such repetition might make the task of billing seem perfunctory, but in fact billing is a cornerstone of the legal profession. Billing justifies the lawyer’s charges to clients, employers, and third-party payers. It communicates to the client the tasks that a lawyer has undertaken on her behalf. It is often the best contemporaneous documentation of how a lawyer prepared the case and analyzed the various issues addressed. And it is an essential piece of advocacy for the client when it is presented to the court as part of a motion seeking recoupment of attorney fees.
The centrality of billing to the legal profession necessitates that lawyers continually work toward “perfecting the tenth” in their practices. This is achieved by conducting a thorough and ongoing evaluation of one’s billing practices and habits—both good and bad.
The Ethics of Billing
Because it touches so many aspects of the profession, billing implicates numerous rules of professional conduct and fiduciary duties. For example, accurate and detailed bills can do much to satisfy a lawyer’s obligations under Colo. RPC 1.4 (communication). Attorneys communicate with their clients through their bills. Billing is certainly not a replacement for regular emails and phone calls with a client, but bills communicate the lawyer’s work on the client’s behalf on a particularly granular level.
Billing is also linked to the lawyer’s duty to hold retainer fees in trust. Erroneous billing can lead to the improper removal of money from the lawyer’s trust account and a potential breach of fiduciary duty claim or disciplinary action for failure to properly maintain funds in the trust account.1 If billing is submitted to a court as part of a fee request, that billing is subject to Colo. RPC 3.3.2
Billing is tied to the lawyer’s duties of honesty and trustworthiness under Colo. RPC 8.4. Billing that the lawyer knows inaccurately reports work performed on a client’s behalf is not merely unethical; it can also be a form of fraud.3 And it casts a poor light on the profession as a whole.4
Many articles have been dedicated to the worst kinds of billing misconduct—double billing, bill padding, altering the names of the attorney providing the services to misrepresent associate work as partner work, “value” billing, bill inflation, and outright fraud.5 The purpose of this article is not to explore intentional billing misconduct. (If you are unaware that it is a breach of professional ethics to commit fraud on your client, then you missed several very important classes, from kindergarten through law school.) However, the misdeeds and mistakes of other lawyers are instructive in evaluating billing practices. Good billing practices develop trust and confidence with the client.
Providing Client Service through Bills
Happy clients make the time you spend at work more enjoyable. Keeping clients happy requires making bills easy to understand and easy to approve. Reviewing attorney billing is no one’s favorite task, but for corporate clients, it is someone’s job, likely that of in-house counsel. This task usually involves reviewing the billing, determining whether it is reasonable and consistent with the objectives of the representation, and forecasting legal expenditure trends.6 Clear billing that makes it easy to show the reasonableness of the requested fees makes in-house counsel’s job of justifying paying that bill much easier.
Billing entries should describe the task and the purpose of that task; no one wants to see a billing entry for a significant amount of time with insufficient description. For example, document review should be tied to its purpose, and bills can designate specific documents, even the Bates range, that was reviewed. From a customer service perspective, what you do
not bill for is often worth its weight it gold. For example, billing “0.0” for leaving a telephone message is a reminder of the task and keeps a record of diligence without making the client feel gouged. It is essential to look at the bill from...
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