Drivers of Excessive Legal Fees | Sterling Analytics
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Fee Drivers

Although hourly rates charged by many attorneys may seem excessive, rates are less important to your overall legal expenses than how firms charge their time.  For example, minimum billing increments of quarter-hours can lead to significantly higher bills than tenth of an hour increments (Brandt v. Astrue, 2009).

But beyond billing rates are many other improper billing practices that violate attorney-client contractual agreements, ignore accepted ethical standards, and suffer from manual or duplicative billing errors. Common examples include:

  • Charging clients for firm overhead.
  • Pyramiding (i.e., charging for clerical work at attorney rates).
  • Changing hourly rates without prior approval.
  • Changing staffing for the convenience of the law firm without prior approval.
  • Billing for time spent creating or reviewing bills.
  • Using multiple attorneys to accomplish work of a single lawyer.
  • Recycling work product and charging as if the work was newly created.
  • Billing for time used to train new Associates.
  • Attending a court hearing, conference or deposition with a large “support” group.
  • Billing improbably long days.
  • Billing in large “blocks” of time, masking the amount of time required for each individual task.
  • Billing in large “minimum” time segments, such as 15 minutes for leaving a voicemail.

Our bill audits routinely discover frequent and sizable patterns of improper charges for our clients. The results of two audits are summarized below.  See our approach page to find out about Sterling Analytics’ 4-step process for reducing legal costs.

Case Study 1  

Large Regional Bank
An audit of a banking client’s legal bills revealed more than $40 million of objectionable charges across five categories of excessive fee drivers. An astounding 50% of charges used impermissible descriptions of task.

 

 

Percent of charges that are objectionable

Case Study 2  

Law Firm Billings
30% of a law firm’s billings to one of our clients were found to be objectionable, because the firm was charging overhead costs to the client, using vague billing entries, and over-staffing with multiple attorneys.

 

Law Firm Objectionable Charges

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