I Owe How Much ?!?

Truth be told, there are some lawyers who are simply not that good. Several studies of lawyers polled anonymously, including one conducted by the Cumberland School of Law, Samford University (williamgeorgeross.com/surveys.html), show that many lawyers purposely pad their bills. In a recession that has been particularly difficult on the larger firms, the pressure to bill large hours has never been greater. Many low billers have lost their jobs, and those that remain at the larger firms have taken notice. In this environment, it is important that clients understand their legal rights in the event that they need to dispute a bill. Here are six things to keep in mind.

1. Review the details of legal bills as soon as you receive them. Monthly billing is the norm, and for good reason. The primary reason to read your bill is not to catch your attorney in some mistake, but to stay on top of what work is being done. If you have questions about your bill, they will be much better received by the attorney if they are raised promptly. A good attorney working with your interests in mind will be happy to explain.

2. Standard billing practices can be disputed. The law surrounding legal fees is complex; however, courts have invalidated many common billing practices including:

• Lawyers charging for secretarial or clerical services as billable time;
• Bills that have not been itemized to reflect the work done;
• Excessive time to complete a task;
• Excessive staffing of a legal matter; and
• Undisclosed mark-ups on expenses such as copying and faxing
• If you suspect your attorney of invalid billing practices, consult another trusted attorney, or an attorney who specializes in legal ethics.

3. Just because you have a retainer that doesn’t mean you can’t fight legal fees. Courts will not allow attorneys to use unreasonable retainer agreements to collect a fee. One of the ironies of law practice is that lawyers protect their client’s rights for a living, yet start off the attorney-client relationship with a retainer agreement that is specifically designed to curtail some of those rights, including provisions that give the law firm the right to raise their rates every year, provisions allowing mark-up of expenses, and provisions allowing the law firm to charge interest on overdue bills.

4. Lawyers do not necessarily have the right to fire a client because of a fee dispute. You can always fire your lawyer; but lawyers are not free to fire clients without following ethical rules designed to protect the clients from undue prejudice. Lawyers with a case before a court usually have to ask a judge for permission to withdraw from a case. Permission is usually granted when the client owes the lawyer money; but, a client has the right to oppose the lawyer’s removal from the case, and a judge may insist that the lawyer stay on the case if the fee request is deemed excessive, or if the case is ready for trial.

5. There are significant limitations on lawyers acting as creditors. Like other businesses and professions, attorneys can take steps to collect accounts receivable. However, lawyers’ unique role as both fiduciary and legal advisor subject them to more limitations on their conduct than other professionals. Lawyers can and often do sue in arbitration or regular court to obtain payment, but they cannot use their legal expertise to mislead a client into thinking that their claim for fees will prevail in fee-dispute litigation. Lawyers can also retain client files pending either receipt of outstanding bills or a legal determination of their fees.

6. Lawyers are likely to settle disputes. Lawyers are wise to avoid fee disputes unless their conduct is beyond reproach. Fee collection claims can lead to ethics complaints and legal malpractice counterclaims. Attorneys—like everyone else—often lack objectivity concerning their own conduct and can convince themselves that they have little to fear. However, even under the best circumstances, fee-dispute litigation with former clients is unpleasant and a massive energy drain. This provides clients with leverage to negotiate a favorable resolution of the fee dispute. The best negotiating strategy will necessarily depend on the facts specific to the representation, as well as the personalities involved. But, typical ways that clients negotiate reductions include offering to make a substantial immediate payment in exchange for a reduction in the amount owed; and offering to pay all outstanding amounts in exchange for fee relief moving forward, such as an agreement that the attorney will see a case to its conclusion on a contingency or fixed-fee basis.