Legal Practice Billing Fraud

One of the cornerstones of the attorney-client relationship is trust. Clients place trust in the attorney’s competence to handle the legal issues in their matters and to routinely communicate with the client so that they are suitably informed about all relevant and material matters affecting them. And, of course, the client expects to be billed accurately and appropriately for the legal work done. 

In many legal relationships, clients are billed hourly. It is common for a law firm to request an upfront retainer from which the law firm takes regular payments as it bills its hours. The retainer is kept in the firm’s trust account and its funds should not be commingled with the law firm’s operating accounts. Unfortunately, the hourly billing practice is often subject to abuse where clients are overbilled. A client who feels cheated by a lawyer or law firm will undoubtedly lose all confidence and trust in them.

Billing fraud is when a lawyer misrepresents the work and duration of a task or engages in the following practices:

  • Duplicate or multiple billing for the same work
  • Assigning multiple persons to bill for essentially the same work such as appearing in court with multiple attorneys and paralegals for a simple motion or short court appearance
  • Padding or overcharging for work, i.e., billing excessive hours for a simple or trivial task that might take a few minutes or less or that could be performed by a non-attorney
  • Charging for secretarial or clerical work that is non-legal
  • Block billing—charging for separate services without specifying the time for each
  • High minimum billing times—billing in increments of a half-hour such as talking on the phone for 3 minutes but charging for 30-minutes
  • Providing obscure or generic descriptions of work such as “reviewed file” or “took notes” 
  • Detailing excessive work such as a single biller working and charging 24 hours per day for several days in a row
  • Charging excessive expenses such as 4-star hotels, first class flights, luxury meals, limo rides, and for other ventures “related” to the case
  • Using a non-legal agent or subsidiary for non-legal services and charging the client
  • Up-billing or rounding up hours

Lawyers are under tremendous pressure in many firms, especially those seeking partnership positions, to bill a minimum number of hours per year. This is true for paralegals as well. It is not uncommon to see attorneys working until midnight or on the weekends to be sure their hours are on pace with the firm’s expectations. With this pressure is the temptation to overbill or to charge for tasks not performed. 

Clients who suspect overcharging should carefully review any bill or invoice sent to them and not be afraid of challenging the billing. 

Attorney Transparency

Legal fees can be expensive, and folks understand that. However, an attorney and law firms need to be transparent and careful when billing clients since they have an ethical responsibility to their clients to treat them fairly. An invoice needs to accurately reflect the work done and to be detailed when complex tasks are charged such as research for a complicated motion and the attorney’s appearance to argue the motion. 

All law firms are required to provide a retainer agreement for the client to review that includes hourly fees for attorneys and paralegals. If expenses are to be billed, these need to be detailed such air travel or hotel expenses and that the law firm is not charging the client for staying in a luxury hotel or traveling first class when economy travel and less expensive overnights would save thousands of dollars. 

What a Client Can Do if Fraud is Suspected 

A client will be on notice of possible fraudulent billing when she receives an invoice and sees that the charges are not nearly commensurate with the work that has been done. For instance, a client receives a bill for $5000 for the month although she knows that nothing significant has occurred in the case and the billing has cryptic references to the file being reviewed and discussed for no particular reason. She can also see that multiple billings have ensued or that excessive fees are being charged for non-consequential tasks. 

The client can schedule a meeting with the attorney to discuss the billing and to review for herself all work that was purportedly done in the time period billed. If the attorney resists, is unreasonable, or refuses to explain the billing fully or adequately, then the client might consider consulting a legal malpractice attorney.

One way to obviate billing fraud is for a firm to take a case on a contingency basis, where the firm takes its legal fees as a percentage of any monetary settlement or verdict. Personal injury cases are handled in this matter.  Many firms are reluctant to bill in this manner in other cases since they can often make more money if they bill on an hourly basis or if the likelihood of a monetary settlement is either low or in the distant future. And, many types of cases cannot be undertaken on a contingency, such as divorce, criminal, and probate cases.  Some clients, mostly businesses, will pay a monthly retainer to a firm to perform work regardless of the number of hours unless there is a special matter such as litigation where the client and firm will come to some other additional fee arrangement.

One remedy is for us to represent you before the local bar association fee arbitration section or for our legal malpractice attorneys to review your bills and to contact the attorney for a possible resolution. Misrepresenting legal fees or billing is an ethical violation that can lead to disciplinary sanctions from the bar association. These acts can also constitute breach of contract.  In these cases, as with most legal malpractice cases, we need an expert.  

Consult Burns and Jain for Legal Billing Fraud

At Burns and Jain, we take very seriously the trust that our clients have in us and will vigorously advocate for you if your attorney or law firm has been misrepresenting its legal fees and hours. Do not hesitate to contact us at (617) 227-7423 for a free consultation about your legal matter. 

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