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A Moment of (Half) Truth for Legal Billing

Acknowledging the dramatic changes to the legal market over the last few years, an attorney recently wrote an advice column on the blog Above the Law to his fellow lawyers: in a buyer’s market, firms ought to make some concessions to clients. By not charging clients for the little things, attorneys will garner the goodwill of their existing clients, and attract new ones, or so the wisdom goes.

For example, the author suggests firms may wish to not charge clients for costs such as photocopies or electronic legal research services or bill for time spent preparing bills, all in the name of incurring some goodwill. Unfortunately, many of the cost-cutting examples cited in the article should never have been passed on to the client in the first place—and not just out of goodwill. Rather, these “suggestions” are necessitated by the code of professional responsibility, ethics, and law.

According to the ABA (and affirmed in court), charging for overhead costs like Lexis or Westlaw subscriptions, or routine messenger services are not ethically compensable. Attorneys should not be permitted to pass on the cost of doing business to their client. The same goes for billing at full rates for travel time (without performing any work), billing for billing, and charging a markup on photocopies.

Pretending you are giving your clients a “deal” by not charging for costs they shouldn’t be paying for in the first place isn’t much better. I would also take issue with the comment that clients can’t help rein in excessive billing through “mere policing.”

A piece of advice for clients that I can’t argue with? Hire an attorney you can trust.

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Ethical Billing Education