Attorney Fee Ripoffs

Government and corporate clients of law firms should closely examine their attorneys’ billing practices to reduce the serious problem of overbilling in the legal field. Those types of “deep-pocket” clients, in particular, are attractive targets for overbilling scams by unethical lawyers.

One cause of the problem is that many large law firms evaluate their attorneys almost exclusively on the number of hours billed to clients. And they often expect their young associates to bill at least 2,000 hours a year.

Experienced bill auditors state that to meet such a requirement legitimately, a lawyer must work virtually without break for six or seven days a week.

According to U.S. Supreme Court Chief Justice William Rehnquist, attorneys in the 1960s billed an average of 1,450 hours per year. He says he’s concerned that the intense pressures of meeting the current billing requirements may cause some attorneys to, as he puts it, “exaggerate the hours actually put in.”

Rehnquist is not so delicate in his choice of words when describing street crime, even though the ill-gotten gains from attorney white-collar crime usually dwarf the amounts obtained by street criminals. And it is disappointing that he has not made his judicial position a “bully pulpit” to pressure the legal field to correct this problem.

Serious remedial actions are needed, because the overbilling plague is widespread. Harry Maue, a member of a St. Louis legal audit firm, says many attorneys in large law firms face a dilemma: “You either work 60 or 70 hours a week and have no personal life or you’re going to synthesize those bills. Most bills [I see] are padded, whether intentional or not.”

William G. Ross, a Samford University law professor who has conducted studies of billing abuse, reports that outright billing fraud is “much more common than most lawyers are willing to admit.” He also says “a substantial proportion of attorneys engage in billing practices that most lay persons probably would regard as unethical.”

In their book No Contest: Corporate Lawyers and the Perversion of Justice in America, Ralph Nader and Wesley J. Smith describe the problem in chilling terms. They say the overemphasis that many large law firms place on billing “sometimes leads to egregious billing abuses and even outright fraud, at the expense of corporate and, particularly, government clients, who rarely take the time to effectively monitor their legal bills.”

Nader and Smith further maintain that the “practice of inflating charges to clients appears endemic throughout much of legal commerce – attorneys operating their cash registers with premeditated thievery.” They say the problem costs corporations – and ultimately consumers – untold millions.

Those claims are hard to argue with when surveys show that even a majority of attorneys believe there is widespread overbilling in the legal profession. It is a sad commentary on their character that few have called for corrective action.

To deal with this problem, government and corporate clients must do a better job of monitoring their attorneys’ bills. This could include bringing in auditors from the outside, if necessary.

Clients also should look at the possibility of alternative billing arrangements. One example is to pay a flat fee for services instead of an hourly rate.

Additionally, leaders in the legal field should call for law firms to reduce the number of hours their lawyers are required to bill. It is highly unethical to place young attorneys in the position of having to choose between cheating their clients and having a life outside work.

Of course, because many of the leaders set up and profit from the current arrangements, expecting them to solve the problem would in some cases be like asking Simon Legree to join a society for the abolition of slavery. And the analogy is fitting in more ways than one.

Thus, legislation may be needed to protect the public by restricting the number of hours that law firms can require their attorneys to work. This legislation could be similar to a bill introduced in Congress regarding the medical field. The bill would limit the extremely long hours that doctors in training are required to work.

A purpose of the bill is to shield the public from overworked physicians who may be too fatigued to provide competent medical care. Another goal is to protect young physicians from the damage that overwork can cause to their personal lives. Excessive work hours are thought to be a reason for doctors having high rates of divorce, depression, suicide, and drug and alcohol abuse.

In the legal field, similar legislation could protect the public from overbilling and sloppy legal work. It also could safeguard young attorneys from harms to their health and personal lives caused by overwork. And it could alleviate the problem of the alarming number of attorneys who abuse drugs or alcohol.

Finally, legal ethics boards and prosecuting attorneys must take the overbilling problem much more seriously. Lawyers who intentionally overbill – and law firms whose cultures promote or wink at overbilling – are thieves and should be treated as such.