Billing Ethics

Ellen Lockwood, CLAS

Ellen Lockwood, CLAS

More and more legal assistants must now account for their time. What once was virtually the sole area of those working for defense firms, now affects a majority of legal assistants at some time in their career. Even those working on contingency cases must keep track of their time to use as proof for requesting awards of attorney and paralegal fees. In addition to keeping accurate records, there are also a few ethical considerations.

Whether you are keeping time records for client invoices or to support a request for an award of attorney and paralegal fees, the same basic rules should be followed.

Actual Work Performed

We have all heard that tasks that are strictly clerical are less likely, or even unlikely, to be compensable in a request for fee recovery. Clients also may resist payment for these tasks. Some clients, particularly insurance companies, have taken to providing their outside counsel with lists of specific tasks and whom they will pay for performing the task. However, all legal assistants must at time perform tasks that others may consider strictly clerical. It is therefore imperative that when you must perform clerical tasks, you keep time records which reflect how that task was important and how it related to the substantive legal work which you performed on the case. Even then, some clerical tasks, such as Bates labeling, may still be denied in fee recovery.

Examples

• Incorrect: Bates label documents for production.
• Correct: Bates label documents for future identification in preparation for production of same to Defendant Mr. Jones in response to Defendant’s First Request for production.
   
• Incorrect: Review documents from client; file same.
• Correct: Receipt and review of various documents from Mr. Smith regarding transaction with Mr. Jones; organize same; incorporate same into master file.

Detail of Time Records

Although you must be thorough, time entries which provide too much detail will not be convincing. Your entries should state what you are doing and why. Whether your work is substantive legal work should be obvious from the project you describe. Avoid vague entries such as “work on file” or “attention to interrogatories.” Neither a client nor the court would want to pay for work described in this manner. In addition, you should be specific about the amount of time spent on a task.

Try not to duplicate the attorney’s tasks. Courts will generally not award time for a paralegal and an attorney to draft a pleading, but they will allow for a paralegal to do the initial drafting and an attorney to revise the pleading.

If a project continues over several days, use language in your time entries that indicates you are proceeding with the project. Phrases such as “initial review,” “begin drafting,” “continued review,” “continued detailed (or extended) review,” “continued drafting and revision,” and “additional phone conference” alert the client (and the court) that your time entries are not merely duplications of previous entries, but that you were moving forward with your work and were conscious of the time entries you made.

Examples

• Incorrect: Revise first amended answer.
• Correct: Revise first amended answer to include affirmative defenses.
   
• Incorrect: Prepare memo to file regarding phone conference with opposing counsel.
• Correct: Prepare memo to file regarding phone conference with opposing counsel regarding tax aspects of purchase and sale agreement.
   
• Incorrect: Phone conference with Mr. Smith.
• Correct: Phone conference with Mr. Smith regarding revision of affidavit in support of motion for summary judgment.

Additional Considerations

Of course, all of this assumes you are being ethical in your billing practices. Some examples of unethical billing practices include the following:

• Padding your time. This is adding hours onto some task to make up for time spent doing non-billable tasks. You are cheating the client.
   
• Double billing. This is when you bill for more hours than elapsed, such as when you sit in on a document production, but also bill for revising deposition summaries in another case. The total number of elapsed hours is five, but you bill five for the document production and three for the revisions. The total amount of time is only five hours, therefore it is not ethical to bill for more than five hours.
   
• Billing in advance. In order to meet your minimum billable requirement for the month, you enter your time as if you had already completed a task, assuming you will make it up later. This is lying. It also cheats the firm and the client as you will probably have to pad your time on another project later to make up for the time it takes to do the task for which you already billed.
   
• Billing exactly the same number of hours as the amount of time you were at the office that day. This is not ethically possible. Regardless of how hard you worked and how few breaks you took, you did not work all eight hours. You took a few minutes to answer the phone, respond to a question, go to the restroom, get something to drink, organize your desk for the next day, etc.

The only legitimate way to bill for more time than you actually spent on a task is if your firm allows you to bill the same amount of time for the same task. For example, if you work in intellectual property law, you might bill the same amount of time to draft a trademark application, regardless of how long it actually takes you. There may be some times when this task takes you less time than the standard time billed, allowing you to bill that day for more hours than you spent in the office. Other times, you will be behind because the task took longer than the standard time billed. This is only fair if you bill every client the same amount of time (or the same fee).

Clients and the courts are more carefully scrutinizing time entries. Unethical practices only encourage clients and the court to look more closely at your time entries and increase the chance that more of your time entries will have to be written off to satisfy the client, or be denied in a request for fees.

Ellen Lockwood, CLAS, is the Chair of the Professional Ethics Committee of the Legal Assistants Division, a position she has held since 1997. She is Treasurer of LAD and a past president of the Alamo Area Professional Legal Assistants in San Antonio.