Do lawyers routinely overcharge clients by fudging their hours?

Not legal advice:

A court would almost certainly refuse to permit the lawyer to bill you at a lawyer rate for that. They see that sort of stuff as administrative. They will usually let the lawyer charge you for the cost of a secretary or paralegal doing it. If the lawyer does the work, though, a lot of courts just assume that’s bundled into the hourly rate.

Not legal advice

Good advice.

I thought they surgically removed those around the second year of law school?

:wink:

You should have complained. And, that lawyer was dumb, as this is obvious bill padding. All that obviously could be done by a secretary. At secretary wages.

An attorney should eat his mistakes.

They tried. I was scheduled for the surgery, but I was out watching re-runs of MAS*H that day. :smiley:

I agree. But since we had made a mistake as well, they felt it was our problem. (The equivelent of putting Eddie instead of Edward on the initial papers.)

Just on this, you saying this affects their salary at the end of the day, or only how many billable hours they get credited with at the end of the year?

It’s not an either-or proposition. Billable hours always affect compensation in the end, even if there’s no direct mathematical formula. Exactly how depends on the firm.
I agree with those that say that padding happens, that it’s rare, and that the opposite is more likely. I spent over 11 hours today and 15 hours yesterday on one’s client’s matter. (Last night, I left my office after 1:00 a.m., and I took work home. Tonight, a meeting wrapped up after 9:00 p.m. Fortunately, it was 3 blocks from where I live.) When I turn in my timesheets tomorrow, I’ll probably show about 22 hours. If I do decide to bill the whole time, I’ll end up writing it down at the end of the month, so it’s just easier this way.

(No, this wasn’t a normal week or month. Yes, I will be glad when this week is over.)

As professionals, aren’t lawyers salaried “exempt” employees that get paid the same regardless of hours worked?

On a related note, I’m an engineer working at an engineering consulting firm. We also go by billable hours. I am an “exempt” salaried employee. However, my company pays non-management employees “straight” time for hours billed over 40. If I work 50 hours a week and bill 40, I get paid for 40 hours. If I work 50 hours a week and bill 50, I get paid for 50 hours at the hourly rate that equates to my salary.

In practice, billing for more than 40 hours in a week is frowned upon unless we have an open-ended contract with a client, like for construction oversight or engineering on-call services. More typically, we have lump-sum contracts, with strict budgets on the hours. (i.e. we have only a limited number of hours in the budget to complete the project. If we complete the project in fewer hours, it’s more money in the company’s pocket.) So the pressure on us is to only bill 40 hours a week, while working 50+ hours to keep all of the lump-sum projects within budget. :frowning:

Well… both, in a way.

Let’s say a young associate interviews at two law firms. In the interview, the partners of each firm tell the young young associate they want him to maintain “160 billable hours per month” at an annual salary of $x, with a bonus of $y for hitting 180 billable hours in any given month.

By “160 billable hours per month” Firm A means “160 booked”. The firm probably has some standard acceptable level of write-offs to calculate acceptable levels of efficiency. Let’s say the firm knows that 1st year associates usually have a 30% write-off rate. So long as the young associate hits 160 booked, keeps the write-offs below 30%, and bills out 112 to clients, then things work out well.

By “160 billable hours per month” Firm B means “160 billed”. The number of hours booked doesn’t mean squat to the firm. The firm expects the associate to book however many hours necessary to hit “160 billed.” Assuming a 30% write-off rate, the associate would need to book 230 hrs/mo to hit the target.

The same expression, “160 billable hours per month,” means two different things to two different firms.

Firm A: 160 booked, 112 billed, associate salary $x, bonus kicks in at 180 hours booked
Firm B: 230 booked, 160 billed, associate salary $x, bonus kicks in at 260 hours booked

Our young associate at Firm A proudly turns in his time, reflecting 160 booked, and all is well.

Our young associate at Firm B proudly turns in his time, reflecting 160 booked, only to get slammed by the partner a couple weeks later for having only 112 billed, 48 billable hours below target. Guess who’s just found out the hard way that he has to work every weekend to meet Firm B’s expectations?

Where would you rather work?

Yes, but your effective hourly rate is better at a firm with a lower billing target.

This is what evil partners at law firm tell young associates in interviews. “We don’t want you to spend your whole life working, we want our associates to have a life outside work, so long as you hit your billing target of 160 billable hours per month.”

[I won’t mention how that means “160 hours billed, not booked” and how imposible that target is to hit. I’ll just wait for the associate to take the job, work a few months, then slam him when his hours come up short. Then, I’ll tell him he needs to work harder, while stealing his hours away for myself, all the while blaming him for the billable shortfall. Then, he’ll fear for his job and work his ass to the bone. He’ll be working so hard trying to keep up that he won’t have time or energy to look for another job. By the time he figures it out, I should have milked him for about a year. He’ll quit, then I’ll just hire some other poor schlub fresh out of law school to do all the hardest and most complex shit work on all the shittiest cases in the firm for another year. Repeat.]

Moved to IMHO for further discussion.

-xash
General Questions Moderator

I also want to point out that the opposite happens regularly too. There are many lawyers who feel they cannot charge more than a certain number of hours / run up a certain cost, even though they’re spending more time on the case. I wrote a system that gives lawyers a one-click access to the time they booked, and remember that some lawyers reacted like ‘yikes, so much time already? I can’t book that!’.

You have to remember that competition does work - in areas where companies can choose between law-firms, lawyers can be very conscious about how many hours they can bill for certain work in order to keep the client happy, and more often than not this is less than they actually work for that client. A good example are big banks, they usually are in direct contact with a score of law-firms and will have them groveling at their feet for their favors, and then have them working till 4 A.M. in the night to meet a certain deadline.

Fixed fee deals are also slowly gaining in popularity, especially for big deals. These are relatively new though - at least, I remember when our firm introduced a method of calculating those earnings back to billed time properly, something which is pretty essential, or else a lawyer will make the firm a lot of money without actually making his targets ;).

With an increased sense of the importance of reputation (the Arthur Anderson / Enron affair caused many law-firms to change their company structure to more independent, limited liability units), overbilling is considered a serious danger to the success of a firm now by many larger law-firms.

But there will always remain situations and lawyers who will try to get away with it, as for any profession that is payed by the hour. In that sense, the notary profession (at least in the Netherlands) shows that fixed fee rewards are better - they very, very early on (like over 15 years ago) started using computers to more efficiently create legal documents because the more documents they produce per hour, the more money they make. As a result, that part of the work (which is a big part of the work also in many other areas of law) was done very and increasingly efficiently.

Billable hours…the curse of all law firms.

First of all, filling out the time sheets.

I once worked for a non-profit charity and they fired a major law firm - ready for this? The law firm charged them .4 hours to prepare their bill! And they were stupid enough to put it on the bill.

That said, EVERYONE at a law firm pads the billable hours. However, the Partners in charge of reviewing the bill usually fudge that and reduce the fees if it just “doesnt seem right”. I have seen that a lot.

What is interesting is to see bills from one law firm to another. Then they get serious. They nitpick about fax charges, photocopy charges, scanning charges…they also have fits about how long it took to write a simple response or to prepare a subpoena. You want to see bills decrease? Watch what happens when you see one law firm bill another.

To be fair, I think most final bills are accurate. Most reputable law firms know how much a case will cost and will fiddle with the billing to make it fit.

It is not easy to rationalize spending 5 hours doing billable, but in reality, you had to do research, call down to filing, get the reports, read through them, realize you are missing five pages, call down to filing again, get them to pull up the records again, make four phone calls, wait to talk to the partner, ask the secretary to re-type the memo…at the end of the day, you really did spend the whole time working on the case, but damn those billable hours and trying to rationalize what you actually accomplished.

So should a surgeon.

When I suggest it to my doctors, though, they look at me funny.

Sounds like they got it backwards. If I was that attorney, I would have said, “Since I have to go in and fix my mistakes anyway, I’ll just fix yours while I’m at it, at no additional charge.”

If I had a secretary, I would probably just have my secretary fix it. It’s no big thing. I never charge for cleaning up my own mess. And little edits, why bother? It would take me more time to bill you for the editing than it would to do it.

Certainly that would have gotten them our future business, and better word-of-mouth, rather than losing our business and having me tell everyone the story.

It goes to show that you can be a great lawyer and a horrible manager or businessman simultaneously.