Over-billing. Client, Beware.

Every so often, we see press reports of over-billing by lawyers and law firms.  Most of these stories involve large firms, as does the latest story, about DLA Piper, the world’s largest law firm, with 4,200 attorneys in offices all over the world.

Unfortunately, over-billing is not confined to large firms; it’s a temptation for any attorney, given that clients frequently are at an information disadvantage when it comes to understanding what attorneys do, the degree of difficulty involved, and the amount of time required.  Even when a firm provides a detailed invoice, a client may find it difficult to distinguish between necessary and unnecessary tasks, and at a loss to understand how much time is actually required to accomplish a specific task.

Over-billing generally takes two forms:  Padding the amount of time required to accomplish a specific task or complete a matter; or, performing work that is superfluous to the completion of the matter at hand.

What should you do to avoid over-billing?  And what should you do if you think you are being over-billed?

First, and most importantly, be clear about what you want your attorney to do, and what he or she will do.  Have him or her list and explain the steps to be taken to resolve an issue or complete a matter or transaction.  Don’t be afraid to press for details or clarification.  The best client is an informed client.

Get an estimate of the amount of time required to do the work.  Remember that an estimate is just that; facts and circumstances will necessarily have an impact on the amount of time required to complete a task or matter.  Attorneys will have no difficulty estimating the amount of time required to complete a routine task, such as organizing a corporation or limited liability company; it is more difficult to provide a firm estimate where third parties are involved; for example, in litigation or the negotiation of a contract or deal with a third party.

Be sure to ask whether there are fees or charges payable to a third party, such as a governmental entity or agency or process server, and whether these are included in the attorney’s estimate or are billed separately.

Ask the attorney to explain his or her billing practices.  Insist on a detailed invoice broken down by task, and that shows all charges not included in the hourly rate. Many attorneys bill separately for items such as photocopies, long-distance telephone charges, overnight delivery and travel expenses, in addition to time charges.

Don’t be afraid to question a bill; it’s a client’s right to do so.  If something does not look right, ask about it.  We all make mistakes, and there is no shame in correcting a mistake.  If your attorney is less than straightforward when discussing his or her billing, you may want to think about making a change before a question ripens into a dispute.