I am often asked to take over cases from major L.A.-based firms. Far too often, I uncover rampant billing abuses and outright fraud committed by the client’s former lawyers. It has become so common that I decided to draft this article to better educate the public.
To be clear, this article is not intended to solicit cases: this firm does not specialize in legal malpractice (there is rarely enough money involved in such cases to justify hiring an expensive lawyer). The aim is to educate others on how to protect themselves from bad lawyers. As they say, “one bad apple spoils the bunch”; thus, all lawyers benefit when clients hold the bad apples accountable.
This chart identifies the most common abuses committed by lawyers as well as remedies for holding them accountable. A more detailed discussion follows.
Bill padding is the perfect crime. It is the most common sordid act engaged in by former lawyers who previously handled my clients’ cases. In simple terms, bill padding is the act of over-charging a client for legal fees. An ABA Journal article suggests that 21% of lawyers engage in this practice. Here are the most common things to look out for:
Most law firms bill in 6-minute increments. That means a task that takes 6 minutes to perform is billed as “0.1” hours. One of the most common forms of bill padding involves rounding up to the nearest hour or half hour. By rounding up, a 6-minute task gets billed to the nearest half hour, meaning it is billed as “0.5” hours. I often see invoices where a lawyer bills his client “0.5” to review each email, including an email that simply said “Thanks”. This is neither honest nor reasonable, and constitutes outright billing fraud. If billing entries consistently end in “.5” or “.0,” then you know your lawyer is rounding up and taking you to the cleaners!
“Review the File”
Be skeptical of any invoice where a partner billed to “review the file,” “review letter,” “review motion,” or “review email.” Is the partner truly reviewing a junior lawyer’s work product, or is he just scanning the file to generate billable hours?
I once knew of a partner who billed time to review every document generated on a case, despite the fact he never actually looked at any of those documents. That partner was simply looking to generate fees. This is more than unethical—it is blatant fraud, and yet it occurs commonly at some big firms.
If a junior lawyer is doing all the work on your case, and the partner does not have an excellent grasp of the facts, background and litigation strategy, then it is fair to question whether that partner is truly doing any “review” or simply billing you for it.
Many law firms bill for overhead costs, charging clients for secretarial work, clerical work or word processing as well as printer, fax and research costs—often at a very high markup. By example, many firms profit off legal research by charging the client an exorbitant amount for Westlaw or Lexis, an amount far beyond what the firm actually pays in fixed monthly subscription fees. The profit margins here can exceed 1,000%. Firms do this knowing most clients will “assume” these fees are legit out-of-pocket expenses and won’t question them. You should question them!
Block billing lumps together many activities and does not break them down by time spent, such as “Research experts, draft letter, attend court hearing – 8 hours.” The appropriate way to bill would be “Research potential experts to address market share calculations under antitrust law (0.7); draft letter to opposing counsel re: outstanding special interrogatory responses (1.2); attend court hearing re: pre-trial conference (1.4)—3.3 hours.” By eliminating specificity and billing all tasks in one block, the lawyer can fool the client to think more time was spent than was actually the case. This is fraud, and yet, it is extremely common.
The client should object to block billing and demand that her lawyer record and describe his time with sufficient detail to enable the client to evaluate the services provided and the time spent for each task.
Billing two clients for the same hour of work is wrong; yet, many lawyers bill for “recycled” work originally done for another client. This appears more common among transactional lawyers who draft contracts. They may draft a Partnership Agreement for one client and then use that same document as a template to craft a modified version of the Partnership Agreement for a second client, then a third client, then a fourth client, and so on. Each client is charged for the time the lawyer spent drafting the original document many years ago, rather than simply the time spent on modifications. So, if the lawyer spent 10 hours drafting the original document for the first client, and 2 hours drafting a modified version for the second client, both clients are charged 10 hours each. Ethically, the second client should only be charged 2 hours—that is how much time it took for the lawyer to draft what the client wanted. Having access to templates of old contracts is useful since it avoids the need to reinvent the wheel and makes lawyers more efficient. But, billing every client for the time spent to draft the original document amounts to double, triple, quadruple billing. It is a highly profitable practice, but it is cheating the client!
Double billing is another common practice but difficult to prove. A common example is when a lawyer sits in court working on another client matter as he waits for your case to be called. That lawyer will often charge both clients for his time. An honest lawyer will work on your case while waiting in court, since he’s billing you his wait time. If that lawyer needs to work on another case, he should not bill you for that period of time that he’s working on another client’s matter.
Vague, cryptic or incomplete summaries of services aren’t unethical, but they may be suspicious. If a lawyer uses nonspecific descriptions such as “E-mail client,” or “Research caselaw,” ask him to provide you with more explicit summaries that can be verified as actual client work and ask to see the work product. By example, if he billed 0.5 hours for an email, check the email to see if it looks like something that would take 0.5 hours to draft; if he billed 3 hours for research, ask to see the research memo or printed cases to gauge whether it looks like 3 hours of work.
Oftentimes, big firms will stack a case with junior lawyers who have inadequate experience to handle the tasks assigned to them. Those junior lawyers can take hours “learning” how to draft a motion or prepare discovery. They are often present at depositions alongside the partner, “learning” how depositions work. This is great experience for the junior lawyer, but the client should not be billed for on-the-job-training.
Some firms will overwork a file in a concerted effort to generate as much fees as possible from a client. In one case, DLA Piper, one of the largest law firms in the United States, was caught overbilling a client when internal emails revealed the following exchange between the lawyers:
“I hear we are already 200k over our estimate – that’s Team DLA Piper!”
“Now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode… That bill shall know no limits.”
If your bill shows multiple attorneys working on the same task, or you are being charged for work that seemed unnecessary for the lawyer to perform, this is a red flag.
A lawyer who needs to meet a billable hour goal but is falling short may be incentivized to fabricate time entries. It is outright fraud, but it happens. I have known many young associates who toiled away at the biggest firms and openly admitted to billing for work they never did in order to meet their billable hour requirement. If you suspect this has happened to you, ask to see all the work that you have been billed for. If the law firm fails to produce work product that you were billed for, that is a sign that you were charged for work that was never done.
Some lawyers engage in petty discovery disputes that significantly drive up costs for the client. Those multiple motions to compel are not cheap; and, oftentimes, they are a complete and utter waste of time and money. The best interest of the client should be the driving factor on whether to wage a discovery war, but that is not always the case. These disputes generate a lot of fees for the lawyer and some are so blinded by self-interest that they wade into costly disputes without first doing a cost-benefit analysis with the client.
Other ways that law firms generate unnecessary fees is by advising the client to pursue strategies that cost significant sums of money but yield zero results. A common example is the insistence by so many lawyers to file expensive, meaningless demurrers to pleading defects in the complaint. In the vast majority of cases, a demurrer serves only to educate the plaintiff on the weaknesses of the case. If the pleading defect is correctable, it generally makes no sense to demurrer. The judge will simply grant leave to amend, and in all probability the plaintiff will eventually correct the defect. In such event, all the demurrer will have accomplished is to run up the costs for the client and gift the plaintiff the knowledge of how to improve the weak areas of his case… thanks to your lawyer having educated him. A well-known practice guide gives the following prophetic advice: “The biggest potential disadvantage of a general demurrer is the risk that it may ‘educate’ plaintiff’s counsel: i.e., it may cause him or her to rethink the case, and come up with a stronger cause of action or legal theory. In that event, your demurrer will have backfired, since you will be faced with defending against a more difficult and stronger case.” (Weil & Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group 2021), 7:4.2.)
Bullying is for losers and often leads to costly scorched-earth litigation tactics that do more harm than good to the client. I have found that every time an opponent engages in bullying tactics, it is because he has a weak case and is trying to overcompensate with extreme bravado. The opponent who is calm, relaxed and fearless to take his case to trial is the one to be concerned about the most – because that person is confident and likely knows something you don’t.
Litigating for Spite or Revenge
Don’t file a lawsuit or engage in litigation tactics purely for vindictive reasons. You’ll only end up hurting yourself. Besides generating excessive litigation expenses, your health and happiness will suffer. If you look honestly in the mirror and realize that your motivation is spite or revenge, it’s in your own best interests to find a way to settle or otherwise end the case.
Oftentimes, a plaintiff’s lawyer with a good claim will lump it together with a bunch of frivolous claims. He thinks a 50-page complaint with 10 causes of action is better than a 5 page complaint with one cause of action. He is deadly wrong. Filing frivolous claims exponentially expands the scope and time spent on discovery, motions and trial—all at the expense of the client. A defense lawyer focusing on the frivolous claims can file a 128.7 motion exposing the plaintiff and his lawyer to sanctions. Further, the defense can cast a dark cloud of incredulity on the plaintiff that dilutes the legitimacy of the good claim. Consider this: if a jury feels the plaintiff filed 9 meritless claims, they are far more likely to believe a defense argument that the good claim, while styled well, is also meritless.
Report Lawyer to the California State Bar
If an attorney has breached their fiduciary duty to you by engaging in any of the misdeeds described above, you should file a Complaint with the California State Bar. Even if you don’t get immediate action, filing a complaint helps. Attorneys who take advantage of one client oftentimes have done so to others in the past. The more complaints filed against that attorney, the more likely the State Bar is compelled to take action as they will see a pattern and practice of misconduct.
Post Review of Lawyer Online
Some lawyers heavily market themselves to the general public and rely on consumer reviews for future referrals (our firm does not market or accept online referrals). If your lawyer relies on public advertising and online reviews, then posting about your experience on those review sites (e.g., Avvo.com, Yelp) could help others avoid using that lawyer’s services.
File a Lawsuit
File a lawsuit for fraud, breach of fiduciary duty, breach of contract and/or legal malpractice against the lawyer to recoup ill-gotten gains. Find a malpractice attorney skilled at identifying and resolving fee disputes on behalf of their clients—there’s plenty of them out there. Bear in mind that if the lawyer you are suing is defending himself, or is represented by an attorney from his malpractice carrier, he incurs almost no expense in the suit. Meanwhile, you will be paying another lawyer his fees to prosecute your malpractice/fraud lawsuit. With that in mind, you should seriously consider whether the time and money you spend is worth whatever reward you get in the end. By example, if your lawyer cheated you out of $20k, it’s not worth spending $50k to get that $20k back—it’s far better to simply report the lawyer to the State Bar, leave him a bad review online, and move on with your life.
You can contact the local county bar association to request arbitration of your fee dispute with your lawyer. These arbitrations are promoted as low-cost with quicker results than a court proceeding.
Don’t Pay Final Bill
Oftentimes, if a client comes to this firm having been swindled out of tens of thousands of dollars by a bad lawyer, I will advise them of the pros/cons of not paying the final bill. If that bad lawyer elects to sue you in a public courtroom, as you defend that suit, you will expose him for the fraud and huckster that he truly is. Most lawyers who cheat, lie and steal are reticent to sue their clients in their local courthouse for fear of being exposed in front of the very judges they appear in front of every day. Some lawyers will avoid this dilemma by sending your bill to collections instead of suing, leaving you to deal with collectors and credit reporting agencies.