Ethics Survey Finds Lawyers Lower The Bar
Published: Jun 24, 2007
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TAMPA - Can your lawyer collect 12 hours' pay after working an eight-hour day?
A recent survey shows that about a third of U.S. lawyers have done it. Nearly half of all lawyers don't see an ethical problem with it.
The American Bar Association and the Florida Bar condemn the practice, called "double billing."
Some lawyers have another name for it: stealing.
But it may not be that simple.
Think of an ethical billing dilemma in these terms:
A lawyer is on an eight-hour flight from Tampa to Seattle. The lawyer's client has agreed to pay for business travel. In flight, the lawyer reviews the file of another client and drafts several letters, which takes four hours.
Can the lawyer bill the first client for the eight-hour flight time and the second client for the four hours of case work?
The American Bar Association released an opinion in 1993 that said lawyers should never bill for hours that were not worked. Therefore, it would be unethical to bill for travel time and for work performed during that travel time.
A recent anonymous survey of 251 lawyers from across the country, however, shows that 46.6 percent of lawyers see nothing unethical about it. Of those lawyers who thought this was OK, nearly half said there was no need to tell the client about the practice, which many experts say is the real ethical problem.
William G. Ross, the law professor who conducted the billing survey, said most bar associations and most clients feel double billing is unethical. Even if a lawyer thinks the practice is acceptable, he's not likely to put it in his Yellow Pages ad.
"As a practical matter, most attorneys are not going to go to their clients and ask if they could double bill," Ross said. "The business relationship would probably end right there."
Still, lawyers who do double bill are unlikely to get caught.
Officials at the Tampa field office of the Florida Bar, which accepts consumer complaints against lawyers, said the office reviews many billing disputes but rarely sees double billing complaints.
At the Bar headquarters in Tallahassee, Don Spangler runs a program in which an independent arbitrator helps resolve disputes over legal bills. He also said double billing disputes are rare and hard to prove.
"It's unusual for one client to know what another client is billed," he said.
A Question Of Ethics
Ross, who teaches at Samford University's Cumberland School of Law in Birmingham, Ala., has conducted the billing-fee survey three times since 1991, most recently this year.
Ross said his personal philosophy is a "dissent from the common wisdom": He sees nothing patently unethical about double billing.
"My position on this has been that as long as the attorney is performing a useful service for both clients, the attorney does have the right to bill both clients," Ross said. "Both clients are benefiting from the time. Just because it creates a windfall for the attorney does not mean it's unethical."
The American Bar Association and the Florida Bar strongly disagree.
In its 1993 opinion, the American Bar Association said unethical billing practices are a major contributing factor to the discouraging public opinion of lawyers.
The bar's opinion specifically points to the airplane example and says lawyers need to pass any benefits of time management to the clients. Billing several clients for the same time constitutes collecting an unreasonable fee, which violates bar rules.
Elizabeth Tarbert, the ethics chief for the Florida Bar, said that in the airplane example, one client should be charged for the time the lawyer spent working on the file. The other client should be charged for any remaining time on the flight. A lawyer should never bill for 12 hours when he worked for only eight, she said.
Ross, Tarbert and the American Bar Association agree on one point: The main factor in determining the ethics of double billing is disclosure.
"You should not hide a practice from clients that they would probably object to," Ross said.
Reaction Mixed
Ross's survey showed that 34.7 percent of lawyers have admitted to charging more than one client for the same hour's work.
Many Florida lawyers were surprised when told about the survey results - but the reasons for their surprise differed.
John Morgan, an Orlando plaintiff's attorney who makes money only when he wins a case, said he thinks 50 percent of the lawyers surveyed lied. Most lawyers who bill by the hour pad their bills, he said.
"Think of it this way," Morgan said, "35 percent of lawyers admit to stealing, according to that study."
Katherine Giddings, a Tallahassee lawyer who has written articles that help insurance companies manage bills from their attorneys, said she is surprised so many lawyers would engage in such an obviously unethical practice.
"You're kidding," she said when told about the survey. "I do believe that most attorneys are ethical. That would be very disappointing to me if those numbers are true."
Morgan said double billing is hidden in a number of ways. Many law firms that charge by the hour also engage in "unit billing," he said. If an attorney reviews a claim file, he bills for 30 minutes; if he writes a letter, he bills for 10 minutes. If the file or letter took less time, the bill remains the same.
Insurance companies, which often hire lawyers to defend their cases, routinely audit their legal bills and complain to law firms, he said.
"They call their lawyers and say, 'You overbilled me. Cut it,'" Morgan said. "This happens every day in Florida."
Private individuals in need of legal help might not have the resources or know-how to perform the same type of audit.
Giddings, who does work for the American Insurance Association and has researched billing fees, said audits of legal bills are standard business practice.
"That's a very common practice not just for insurance companies but for many businesses," she said.
Still, Giddings said, typically, the insurance companies and the lawyers have an agreement about what the company will pay for and what it will not. If a bill is inconsistent with the previously agreed guidelines, it will be sent back.
"That should not happen if the attorney and client are agreeing properly," she said. "The client should not be surprised when the bill comes."
Agreeing to billing terms before legal services begin is in the best interest of any lawyer/client relationship whether the client is a multinational corporation or a husband and wife hiring a lawyer to draft a will.
Billing For 4,500 Hours A Year
Justice Stephen G. Breyer of the U.S. Supreme Court sat on a 2002 committee studying billable hours.
Many firms, he wrote, require lawyers to produce a minimum number of billable hours each year. Often that number is about 2,100 hours, or a little more than 40 hours per week.
As a rule of thumb, a lawyer works three hours in the office to bill two hours to a client.
Breyer questioned how a lawyer could undertake pro bono work, engage in legal reform efforts, attend bar association meetings and still bill that many hours.
"The answer is that most cannot," Breyer wrote. "For this, both the profession and the community suffer."
Ross's survey asked lawyers how many hours they billed in the past few years. One lawyer responded that he billed 4,500 hours in 2003. Working 52 weeks a year and working seven days a week, a lawyer would have to work more than 12 hours a day to reach that number.
"Suffice it to say that it would be very difficult for a person of normal stamina to record such extraordinary numbers," Ross said.
"When someone records hours like that, there is a possibility that double billing is involved."
Reporter Thomas W. Krause can be reached at (813) 259-7698 or tkrause@tampatrib.com.
DOUBLE BILLING
•In 1996, 23 percent of U.S. lawyers admitted to billing more than one client for the same period of time, called double billing.
•In 2007, 34.7 percent admitted to double billing.
•In 1996, 64.7 percent of lawyers said they thought double billing was unethical.
•In 2007, 51.87 percent of lawyers thought the practice was unethical.
