Ethical billing practices

 In Georgia State Bar Grievances, Legal Malpractice

Billing is a task most lawyers hate, but it’s the way that we all get paid. The Georgia Rules of Professional Conduct require that attorney’s fees—money earned by lawyers—to be reasonable. There are a lot of factors in the Rule defining what is reasonable, of course. In particular, the experience and expertise of the lawyer can justify a higher fee, like $1,000/hour. And, ultimately, if the client agrees to the rates in the fee contract, chances are good that is what will have to be paid.

But how does Rule 1.5 interact with the lawyer’s duty to communicate?

Bill your client regularly

A lawyer has a duty to communicate with the client. Rule 1.4 is generally vague, but more communication is always better than less. And perhaps better than simply “more” is to engage in regular communication. This applies to billing as much as it does to substantive issues in the client’s case or matter.

First, what does the contract say? If it says, like most probably do, the client will be billed on a monthly basis, then send your billing statements to the client every month. This seems obvious, but busy small practices, in particular, can easily fall behind and forget to send out the bill. Whatever the case, establish a schedule and stick to it. Clients who are surprised by bills “out of the blue” showing exhausted retainers and requesting replenishment may be more likely to complain. It’s also a great idea to get pre-approval from a client for a significant expense, making sure to explain to them why it’s necessary for the representation’s goals.

Billing statements should be clear

Part of the duty of communication is helping to educate the client. If all your client hears or sees is “words words words,” they’re realistically not able to make informed decisions about the representation. These clients are more likely to complain if things go poorly later on. So, make sure your billing statements are clear. What does this mean?

Time entries should be descriptive. If you have to present your bills later for a fee petition, you can always redact them. There are many inexpensive software packages that will allow you to do this on PDFs, too. Descriptive entries help fulfill that need, and duty, to educate the client about what’s going on, and why. Informed clients tend to be happier clients. It is a best practice to memorialize important decisions in the time entry description.  Doing this can help you locate when important decisions were made and can make your search for emails or correspondence quicker.

Time records also should be contemporaneous. Don’t wait to do them at the end of the month. Inevitably, you’ll forget about some minor tasks, maybe a lot of them, and that time adds up quickly. There may also be a temptation to “pad” time. Obviously, that’s unethical—it’s certainly unreasonable to charge a client for time spent on something else—as well as just generally a bad idea. Think about how bad it would sound for you to have to testify under oath about how you “estimated” your time at the end of the month.

To sum up, to keep your clients happy, communicate with them regularly about their bills. Show them, in detail, what they’re paying for. Make sure they understand it. Explain it in clear, plain English. And don’t wait until the last minute to tell a client about a large bill, or a retainer replenishment coming due. Clients do not like surprises; particularly with billing statements.

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