Their 20 hours of time is not reduced because it is a relatively small part of the larger bill, and after all, they have the lowest rate of any attorney on the respective invoices.
Alexa, Brian, and Charles have just graduated from law school with $200,000 in law school debt and another $160,000 in debt on their undergraduate degrees. They each were “fortunate” enough to land a job with a large law firm at a starting salary of $160,000 per year.
They are brand new to the practice of law. They don’t really know how it works or what to do. Many of their initial projects for the firm are first-time learning experiences where they spend a lot of extra time just trying to figure out what their work product should look like. And they dare not ask the partner who assigned the task or another associate for fear of looking like a novice. Then, they are told to enter the time they spent on their respective tasks in the firm’s billing system. They each enter 20 hours of work, although it should have only taken 10 hours.
Their time entries disappear into the firm’s billing machinery, and they never see them again. Alexa, Brian, and Charles assume that the attorney who assigned their respective tasks will make any adjustments necessary to their time entries. But the attorney who assigned their tasks is not necessarily the “billing attorney” who reviews (or should review) their time entries before the client is invoiced for the month. The firm invoices three different clients for 150 hours that month on each of the three associates’ matters. Their 20 hours of time is not reduced because it is a relatively small part of the larger bill, and after all, they have the lowest rate of any attorney on the respective invoices.
Right out of the gate, the client has paid double the amount for their time than it should have paid. But Alexa, Brian, and Charles don’t even know it. Because their hours are not questioned, and the billing attorneys are not looking to reduce the amount of the invoices, Alexa, Brian, and Charles end up billing 2,000 hours in their first year -- an average of 40 hours per week. They’re off to a good start. They each get a raise to $170,000.
They’re off to a good start. They each get a raise to $170,000.
Going into their second year of practice, Alexa, Brian, and Charles have gained some experience and begin to understand the work process. Multiple attorneys assign them work, sometimes from other firm offices. They each typically have 10 different matters for 10 different clients that need attention in a given week.
They honestly bill their time, but because they have become more efficient, they each average only 36 billable hours per week, or 1,800 hours that year. None of them has met the minimum billable hour requirement for the second year. None of them gets a raise and the firm demands more billable hours in their third year.
Alexa ends up billing only eight hours in a 10.5 hour day.
Alexa, Brian, and Charles need their jobs to pay their school debt and to afford the new high-ticket purchases they made while their eyes were still shining at the large salary they received. This is the point where their ethical foundations create divergent paths for them in a large law firm.
They each leave home at 8:00 a.m., arrive at the office every morning by 8:30 a.m., leave the office at 7:00 p.m., and arrive back home by 7:30 p.m. Most people would say they work a lot. They are gone all day long. Like most attorneys, they enjoy the perceived admiration and wear their long hours as a badge of honor.
Alexa is in the category of attorneys who believe that overbilling is unethical. She is diligent about stopping the clock when she receives personal emails and phone calls, when she has lunch, when she searches the Internet for personal reasons, when she checks her social media sites, and when she has conversations with her colleagues that are not related to a legal representation. And she always pauses one client’s clock when she takes a phone call or email from a second client. Alexa is also diligent about entering her time into the firm’s billing system at the end of each task.
But Alexa ends up billing only eight hours in a 10.5 hour day, after deducting an hour for lunch and 1.5 hours for non-billable personal time, like getting coffee, chatting with co-workers, and talking to her fiance on the phone. She is only billing 40 hours per week (2,000 hours per year).
Brian spends the same 52.5 hours per week in the office as Alexa, and he works the same 40 hours of that time. But Brian does not enter his time after every task -- he doesn’t even enter his time at the end of every day. At the beginning of most months, he has to look through his calendar and emails to reconstruct large blocks of time for the previous month. At this point, Brian has to estimate the time he spent on each client’s matter and he is staring at a blank timecard for many days of the month. And he has to account for his time in six-minute intervals. That’s 105 little blocks of time every day and 2,050 six-minute blocks in a month.
But Brian does not enter his time after every task.
Brian underestimates his personal time and overestimates his work time.
Brian’s memory of how he spent his time in the previous month makes those personal detours very short and makes his “work” for clients very long. He does not remember the times that he stopped work on one client’s case to respond to an email from a second client. But he knows he received an email from the second client because it appeared in his end-of-the-month search. So he, perhaps unwittingly, bills both clients for the same hour of time. He does not remember stopping his work for a client to search the Internet for personal reasons or to text his friends. In his rush to finish his time entries, and because he cannot remember how long each task took, he lists multiple tasks under one time entry for a large block of time (called “block billing”) and/or describes his entries in vague language (“inadequate descriptions”).
Brian underestimates his personal time and overestimates his work time. And Brian is entering his time in a vacuum. He doesn’t know what his colleagues billed to any of the clients. This creates the likelihood that Brian and another lawyer will bill for the same work that month, especially since Brian is guessing at the time he spent and the tasks he accomplished.
Brian’s overestimation of his work hours allows him to bill 9 hours of his 10.5 hour day, for 45 hours of billable time each week, for a total of 2,250 billable hours per year, although he only worked 2,000. Regardless of Brian’s motivation, he has overbilled the firm’s clients.
To illustrate Brian’s inability to accurately reconstruct his time, write down specifically what you did every six minutes on this day two weeks ago. It’s difficult, isn’t it?
Charles also spends 52.5 hours per week in the office and works 40 hours of that time. But Charles does not stop the clock on one client when he receives a phone call from a different client. He bills both clients for the same segment of time. Charles bills for half of his lunch hour under the justification that he was “considering” the client’s matter or gave his “attention to” the matter by thinking about it. He also chats with colleagues and searches the Internet on the client’s dime.
Charles’s rejection of the ethical norms allows him to bill 10 hours a day. He turns in 2,500 billable hours per year, when he only worked 2,000. Although clients would call Charles a “thief,” the law firm calls him a “superstar.”
Although clients would call Charles a “thief,” the law firm calls him a "superstar.”