Posted on: 8/2/2012
Lincoln Gustafson & Cercos
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Billing clients for our work is one of the most important tasks for many lawyers. Our bills say a lot about us, both as individuals and as members of firms, and it is critical for lawyers to master the skill of billing in order to succeed at the highest levels of the profession. It is impossible to list all of the tools that must be used for every billing situation, but below are the general tools that should guide every lawyer in billing effectively.
The Level: Above All, Be Honest and Ethical
The most important billing tool is to be honest. Like the construction level that measures the extent to which walls are horizontally or vertically straight, our bills are measured in large degree by their integrity. It is imperative that our bills be honest reflections of valuable and necessary work performed for our clients. Our clients have developed complex billing review programs because (among other reasons) there is a sense of distrust. We can overcome these concerns by carefully billing for our work, ensuring we are doing only work that is required, and only work that has value to our client. If we perceive issues in these areas, we need to address these concerns timely and ethically with managing partners, relationship partners, DRI’s Lawyers' Professionalism and Ethics Committee, our local state bar ethics hotlines, and/or other appropriate persons or entities.
The Drill: Drill Down and Pretend You Are the Client Reviewing the Bill
One of the best ways to become great at billing is to drill down by putting yourself in the client’s position when you prepare a billing entry. Would you want to pay for the work being described, and for the amount of time it took to do the work, if you were the client? If you don’t think so, make revisions. It is actually possible for a client to review a bill and say, “I am SO glad my lawyer did that work and I appreciate SO much that she/he took this amount of time to do the work.” Really! One of the ways we can have clients who feel good about our bills is to put ourselves in their position. If we wouldn’t want to pay for the work and/or wouldn’t appreciate it, then they won’t either. By drilling down and getting in touch with the client’s perspective, we can write better bills.
The Construction Plans: Every Billing Entry Should Be Part of the Plan
One way to look at the bill is to think of it as a set of construction plans that provide the details for constructing a building. Every detail in the construction plans is necessary and serves a purpose, including every nail, every beam and every wall. Similarly, our bills should contain entries that provide all of the details required to handle the client’s matter, from the inception to the end of the matter, including every event that occurred in the case, from the time the lawyer first reviewed the complaint or the client’s concern, to the time the matter is finally resolved, and every motion and discovery matter, every phone call and meeting in between. If the bill is not communicating the structure of the case in a way that justifies the work, the client, when reviewing the bill, is going to wonder why the work was done and why the bill should be paid.
For example, most clients will question a bill for trial preparation when the litigation is at its inception. Such a bill would not reflect a properly sequenced structure. Similarly, a billing entry for “Telephone conference with Roger Jones” does not describe how Roger Jones relates to the overall structure. A better description might be “Telephone conference with Roger Jones, Plaintiff’s direct supervisor and witness to numerous critical events relating to Plaintiff’s employment.” The bill should reflect how each piece fits into the whole, and describe the legal work you have performed, as well as why the work was justified.
The Right People: Every Biller Is Part of the Design
Every person billing on a case or matter should make sure that his or her part fits into the overall plan of the case. For example, if Robert Smith, the associate, bills for preparing discovery on the eve of trial when Partner Amy Jones said discovery was complete a month before, the client is going to wonder what is going on. Similarly, if a client who is interested in pursuing settlement does not see any reference to settlement efforts in the bill, the client is going to wonder why neither Mr. Smith nor Ms. Jones seem to understand the litigation strategy. Also, Tom Brown, the paralegal, should not be doing the same work as Jennifer Black, the associate. The bill should reflect that all of the right people are performing their proper roles, and that the sequencing is consistent with the litigation plan.
The Telephone: Communication Is Key!
The telephone is an important tool, as is email. In order to know that the bill is reflecting a plan to which the client has agreed, it is critical that case/assignment expectations have been discussed and agreed upon with the client, including what the expected fees and costs will be. Many clients have developed litigation plans and budget forms for this very purpose. It is really one of the easiest things to do—tell the client what you think will be necessary in order to get the job done, and estimate what amount of attorney and paralegal/law clerk hours and costs will be required (for those with less experience, ask those with more experience for their estimations), keep track of what you estimated, and let the client know when there are deviations (invariably there will be some, since no one has yet fully mastered the art of predicting the future!). Use the telephone or email to communicate this information or, better yet, meet in person.
Change Orders: What to Do When the Plans Change
Just as change orders in construction are seemingly inevitable, changes in litigation strategy and plans are to be expected. What is important is how we handle these changes. Most clients are forgiving when our forecasts of what is expected must change, as long as we keep them in the loop. Problems arise when we forget to keep track of what we forecasted, and when we neglect to tell the client that adjustments are needed. If you can master the discipline of monitoring the initial plan, updating the client as the matter progresses, and updating the estimated cost, your clients will be happy (well, as happy as they can be!). If you don’t communicate about these issues before the client gets the bill, you will invariably end up having the discussion after your client gets the bill and does not want to pay. It is far better to have the conversation in advance, and clients appreciate it. Communicate about the issues with your clients.
The Building Codes: Know the Rules Before You Get Started
Just as the construction industry is required to follow detailed building codes, many clients have guidelines they want followed for their legal work. Before getting started on every new matter, it is a good idea to get the guidelines out and review them. Be aware that Client A wants paralegals to perform certain tasks, and be sure to follow the guidelines (assuming the work is appropriate for a paralegal—if not, that is another discussion), and Client B requires you to use a certain copy service or attorney service, and then follow those guidelines. Client C may want you to get authority before you do legal research, and to then identify in the bill who provided the authority to do the research. If so, just do it! Your clients expect you to know their guidelines and follow them, and they have every right to expect that you will. It is amazing how many lawyers and law firms do not follow their clients' guidelines out of simple carelessness. Trust me, if you don’t want to follow the guidelines, there are other lawyers and law firms out there that would be happy to do so. Just make sure you do the easy things right. This is one of them. Know the rules.
Know What Doesn’t Work
Don’t try to use a screwdriver when a hammer is required. Many clients have words in bills that just don’t work for them. For some, it’s the word “review” because it sounds like the lawyer is casually reviewing the file over lunch and mindlessly billing for something that has no value. Some clients hate entries for .1 (or 1/10 of an hour) because they feel this level of billing is just “nickeling and diming” them. Others love entries of .1 because they feel the lawyer is being accurate about the time it took to do a task. The truth is we cannot make everyone happy all of the time, but individual clients (including large businesses) have pet peeves when it comes to billing. Find out about your clients' pet peeves, so you have the best shot at producing a bill that will not drive them crazy. Then once you know what doesn’t work for a particular client, factor that information into your bills.
Look at Bills That Have Worked
One of the best tips I ever received was to ask my billing department to give me some old bills that the client paid without dispute. By reviewing the terms used by the lawyers on the file, I quickly picked up great ideas about not only how to bill for that particular client, but also some good ideas about successful billing, in general, to use in other cases and for other clients. Similarly, looking at disputed bills, including accompanying explanations, can be excellent information about what not to do. Reviewing what has worked in the past, and what has not worked, can be very helpful.
Talking—The Lawyer’s Ultimate Tool
Talk to your client when issues come up, and address billing disputes as soon as you learn about them. Once a client voices a concern about the bill, address it head on, or tell the partner responsible for such discussions so he/she can address the matter immediately. These issues never get easier to resolve over time. Billing concerns can fester and grow if not addressed promptly. Sometimes resolution is easy—perhaps an entry was posted to the wrong file, or maybe a 6.0 was supposed to be a .6. Sometimes the issues are bigger, like miscommunication about strategy, but even when the issues are bigger, they are always easier to resolve sooner rather than later. Once you know of a client’s concern, be sure not to make the same mistake again! Either way, handle those issues as early as possible.
Happy Billing and Happy Building
For new lawyers, it can be mind boggling to think you have to account for every .1 increment of your day. For more experienced lawyers, we can do it in our sleep. You will be able to bill like a pro, too. Learn the rules for each client, and once you know the rules, it is often very simple to just follow them. Lawyers who can do that will ultimately be the happiest billers because their clients will be happy with the bills (as happy as they can be to pay a bill!). Happy billing leads to happy building of books of business, which advance lawyers in their firms and in the profession; so your efforts to be a good biller, using all of the tools of the trade, will most certainly pay off.
Teresa Beck is a partner at the law firm of Lincoln, Gustafson & Cercos, a general civil firm with offices in California, Arizona and Nevada. In addition to her involvement with DRI’s Women in the Law Committee, Ms. Beck is an incoming member of the board of the National Conference of Women’s Bar Associations; chair of the ABA’s Work/Life Balance Sub-Committee of the Litigation Section’s Woman Advocate Committee; founder and co-chair of Lawyers Club of San Diego’s Professional Advancement Committee; and a member of California Women Lawyers’ Committee on Advancement of Women in the Profession. Ms. Beck’s practice focuses on construction defect litigation, primarily representing developers, and employment litigation, including representation at administrative levels. She also handles coverage litigation and general business matters.