The Ethics of Billing
You may not have learned much about billing as a law student. Legal ethics was the only class at my law school that covered billing and even then, only briefly. I vaguely recall learning a little about billing for the MPRE, but it is (rightfully) not a heavily tested topic.
The first thing you should know is that two professional conduct rules come into play when discussing billing. Model Rule 8.4 and its state counterparts ban conduct that constitutes misrepresentation, deceit, and fraud, including fraud in billing; Rule 1.5 prohibits lawyers from charging “unreasonable” fees or expenses. These rules, when read together, prohibit two big billing no-no’s: double billing and marking up time.
Double billing is simultaneously billing two clients for work performed during the same block of time. The temptation to do this occurs most often when lawyers travel. Say the lawyer spends two hours flying to attend Client 1’s deposition. While the lawyer is on the plane, she uses that time to work on projects for Client 2. Some clients don’t allow lawyers to bill for travel time, and under that circumstance, the lawyer could only bill the time spent working for Client 2 anyway. But when clients will pay for travel costs, the lawyer may be tempted to bill Client 1 for the time spent traveling and simultaneously bill Client 2 for work on their projects. Voilà—the lawyer has magically made four hours of billable time out of two hours. While none of the comments to Rule 1.5 or Rule 8.4 explicitly address double billing, legal ethics experts agree that double-billing violates these rules.
Marking Up Time
Marking up time also violates lawyer ethics rules. Suppose a lawyer prepares a brief on an issue the lawyer has dealt with many times before. The lawyer performed the research, wrote a brief about the issue on a prior matter, and billed those tasks to that client. In the new matter, the lawyer copies the memo, makes sure the research is up to date, tailors the arguments to the current client’s case, and files the brief. He spends two hours on the task but knows that if he had to start from scratch, he would need four hours to complete it, so he bills the client for four hours. Like double billing, marking up time also violates the professionalism rules.
Billing practices vary significantly from firm to firm and client to client. Knowing your firm’s and client’s billing rules is critical to learning how to bill. For example, some clients won’t pay for:
- intra-office conferences (say, the time the associate spends talking about the case with the partner and receiving a research assignment)
- lawyer travel time
- time spent doing administrative tasks—things like making copies or mailing documents
You need to know what you can and can’t bill for so you can avoid both spending excessive time on work that clients won’t pay for and entering time for unbillable tasks.
Some firms or clients require that time entries are made precisely or that lawyers enter codes into the bills that specify the types of tasks performed. If these are requirements at your firm or for your firm’s clients, you need to learn them early and ensure that you strictly follow them.
Billing Takes Time and Practice
Most seasoned lawyers recognize that summer associates and young lawyers generally are not good at billing. Most new lawyers don’t get comfortable with billing until they are third- or fourth-year associates. Don’t beat yourself up if you aren’t good at billing yet—being a good biller (i.e., someone who is efficient at capturing all their billable time and who rarely has clients challenge or refuse to pay bills) comes with time and practice.
In the first few years of practice, you should expect that some of your time will be written down (reduced) or written off entirely—maybe even as much as 10 to 20 percent. You are still honing your research and writing skills. You’ll get more proficient at both, but it will take a few years, and during that period, expect that your billing entries may be cut.
Unless someone told you otherwise, bill all the time you spend on a task, even if you know some of it will be marked down. At most firms, you will still get credit toward your billable hour goal for all the time you enter into the firm’s billing software, even if not all of that time is billed to the client. Sometimes associates are embarrassed by the amount of time they spend on work they view as “easy.” Still, partners expect that projects will take summer and new associates longer, so there is nothing to be embarrassed about. And many lawyer tasks take longer than you expect, even for seasoned attorneys—I (still) routinely spend an hour writing two-paragraph emails. Don’t short yourself that billable time.
But be realistic about how many hours you can bill in a day. Not everything lawyers do is billable; an 11-hour day at the office might only yield eight billable hours. And that is OK.
Strategies for Becoming a Good Biller
Practice makes perfect, but knowing a few techniques will reduce the billing burden and help you become a more proficient biller.
Bill for All Your Billable Work
Many young lawyers only bill for “big ticket” items, like performing research and writing memos. But at most firms, you can and should bill for tasks like reading and sending emails; taking and making phone calls; reviewing accident reports, medical records, and discovery documents; and speaking to clients, opposing counsel, and witnesses. These tasks may only take 15 or 20 minutes each, but you’ll lose time (and your firm will lose money) if you aren’t diligent about billing for all your work.
Enter Time Daily
Some firms require that lawyers enter their billable time daily or weekly, though bills usually go out monthly. Even if your firm doesn’t require you to enter time daily, this is the best approach to ensure you capture all the billable work you perform. Any lawyer will tell you that this is easier said than done, but I promise that you will lose time if you put it off, especially as a young lawyer. You’ll forget about emails you sent, phone calls you took, and other “small ticket” items that add up over a month. This hurts the firm and your progress toward your billable-hour goal.
Break Down Your Entries
As for the billing entries themselves, break down what you do into discrete entries so that the client can see the value of the time spent. For example, when reviewing medical records, don’t just enter time for “Review of medical records,” particularly if the records are voluminous. Instead, bill for “Review of 800 pages of medical records in preparation for drafting deposition outline.” Tell the client how many pages you are going through, for example, and how the task furthers the case.
Break Down Research and Writing
Similarly, break down research and writing into things like: “Perform research under South Carolina law as to elements of fraud claim,” “Perform multijurisdiction research on whether a golf cart constitutes an auto for purposes of motor vehicle insurance policy.” A client might balk at a five-hour block of time for research but is less likely to do so if the client understands that the time was divided into researching four distinct issues and required a multi-jurisdictional search.
The same holds for drafting memos and briefs—bill for the separate sections of the documents: “Draft statement of facts in support of motion to dismiss,” “Draft summary of the argument,” “Draft argument re: lack of purposeful availment,” etc. Billing this way allows the client to see just how much you are doing. If you spend 10 hours drafting a brief, the client is less likely to question the bill if they know the brief is 20 pages long and covers four different issues. If the relevant procedural rules require certain sections in a brief or memorandum of law or the judge requires that parties prepare certain documents, include that information in the time entry. This further shows the client why the task was necessary to advance the case.
I’ve never met any lawyer who enjoys billing, but with these tips, hopefully, you’ll find billing a little easier as you work toward becoming a good biller.