A recent article, Overbilled by Your Lawyer? You’re Not Alone, told the story of a lawyer whose firm touted expertise that she didn’t yet 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, the founder and CEO of Legal Decoder, a legal data 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,” Rapoport observes, adding, “but most lawyers do their best to serve their clients fairly and do not engage in that type of unethical behavior.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Both lawyers proceeded to list five things clients need to carefully notice about any bill they get from their lawyer and what to do when something appears to be not right.
1. Did the right level of professional work on your matter?
Rapoport: The retainer agreement — the contract that you sign with the law firm — will state who is going to work on the case. For smaller matters, this usually means one lawyer. For larger cases, there could be several attorneys and paralegals. Generally, each one 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 a partner. 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.
2. How many people in the office worked on your documents or appeared in court?
Tiano: In larger matters, there’s a tendency for several 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 they did, because all of those people are “contributing” time at their individual hourly rates. In the end, the “reasonable” fee analysis partly hinges on the unique, independent value delivered by each legal professional.
3. How specific are the descriptions in the time entries on your bill?
Rapoport: 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. This should not come as a surprise to anyone.
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.
4. Did those time entries break down the time spent on each task?
Tiano: 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 lumped together, you have no way to evaluate if too much time — or too little, or just enough — the lawyer spent on “preparing” vs “attending.”
Judges 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 of those sub-items took, a discount is often requested and warranted.
It’s the lawyer’s job under ethical rules to tell you what was done, so any mistakes or ambiguities should be borne by the lawyer and not you.
5. Did the law firm use artificial intelligence to speed up routine tasks?
Rapoport: AI can be designed to automate certain routine tasks and to speed up other, less routine tasks. But a lawyer must be responsible for the work product generated by AI.
When it goes wrong, “hallucinations” (wildly incorrect results) can occur, and only a trained eye will be able to spot them. Lawyers must embrace technology that lets them spend less time on things that computers do better than humans do so that they can devote more time on the things that only humans do well.
At least one court we’ve seen has reduced a legal professional’s fees based on the failure to employ AI tools.
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.
Remember math problems in high school?
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.”
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
Related Content
-
Don't Leave Your Heirs an IRA Tax BombYour traditional IRA has served you well, but when your heirs inherit it, watch out. Consider some of these strategies to minimize their tax burdens.
-
Five Ways to Maximize Your End-of-Year PhilanthropyTo do the most good, pick the right charity, be smart about how you donate and consider giving something just as valuable as money: your time.
-
Don't Leave Your Heirs an IRA Tax Bomb
Your traditional IRA has served you well, but when your heirs inherit it, watch out. Consider some of these strategies to minimize their tax burdens.
-
Five Ways to Maximize Your End-of-Year Philanthropy
To do the most good, pick the right charity, be smart about how you donate and consider giving something just as valuable as money: your time.
-
Three Options for Retirees with an Old (Forgotten) AnnuityDid you buy an annuity in the 2000s? If it’s been out of sight and out of mind since then, it's time to dust it off and start making it pay for your retirement.
-
Tax Software vs a Tax Professional: Which Should You Choose?The simple answer is a question: How complex are your taxes? Here's how you can decide whether you can go the easy route or need the help of a pro.
-
The Key to Choosing the Right Annuity: Do Your HomeworkHere are some of the pros and cons of annuities, along with an explanation of the different types. Which might work for you?
-
Are You Annoyed That You Have to Buy Car or Home Insurance?Maybe instead of considering car and home insurance extra expenses that you don't benefit from, think about how those policies protect your investment instead.
-
Three Positive Ways to Help Your Adult Children FinanciallyIf you're lucky enough to have surplus wealth in retirement, but worry that giving it to your kids will spoil them, consider helping in these practical ways.
-
Advisers Share What They and Their Clients Are Thankful ForFrom pie to growing retirement accounts to moderating inflation, financial advisers and their clients have much to be happy about this Thanksgiving.
