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Nothing Is Certain but Death, Taxes and Bill Padding
Corporate clients can now file "bill padding" in the category of life's certainties, along with death and taxes. We posted about the problem of bill padding here back in August. And now, the topic has resurfaced again at Counsel to Counsel and the WSJ Law Blog with the release of a new survey on lawyers' billing practices by professor William G. Ross of Samford University's Cumberland School of Law. Ross found that two thirds of 251 respondents said they had "specific knowledge" of bill padding, while 54.6 percent admitted that they sometimes performed unnecessary tasks to increase their billable hours.
Ted Frank offers an interesting perspective at Point of Law, suggesting that the problem of pursuing litigation as a path when it's not economically justified poses a far greater problem than bill padding He writes:
I think the problems of bill-padding and double-billing likely pales in comparison to (1) the expense incurred by parties because of lawyers making overconfident recommendations to embark on misguided litigation where those recommendations happen to coincide with the interest of the attorney to bill more hours; and (2) the excessive billing caused by law-firm technological and human-resources inefficiencies that regularly result in the wheel being reinvented at client expense. A disturbing number of the hours I billed as an attorney came about because my firm got involved in a case where a lawyer with a creative theory of business-competition-through-litigation initiated a suit that ultimately cost his or her client more money in the long run.
Frank's post melds well with an earlier post by Greatest American Lawyer Enrico Schaefer, who points out that the billable hour puts lawyers' interests at odds with their clients. The two scenarios that Frank describes involve examples of lawyers who subordinate their clients' interest to their own, either by recommending litigation boost their hours or pursuing a theory that costs their clients more in the long run.
As this WSJ article, More Law Firms Charge Fixed Fees for Routine Jobs (5/2/07), describes, many clients are now demanding flat fees and cost estimates to escape the runaway bills and unpredictability of the billable hour. Flat fees won't necessarily address the larger problems that Frank describes, but at least they'll alleviate the painful symptom of bloated legal bills. And that's a good start.
Posted by Carolyn Elefant on May 2, 2007 at 05:25 PM | Permalink
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