Rule 1.5(a) prohibits a lawyers from making an agreement for, charging, or collecting an unreasonable fee. I’ve often mentioned that the Professional Responsibility Program receives few, if any, complaints about fees. Indeed, my quick research reveals that the last disciplinary decision involving Rule 1.5(a) issued in October 2002.
Still, it’s good to know what’s good and what isn’t.
Undoubtedly, you have at least one friend or relative who frequently announces how wonderful it would be to be a lawyer, if only to bill 6 or 15 minutes for a quick phone call. Earlier today, I stumbled across two cases that shed some light on that exact issue.
The ABA Journal and the Legal Profession Blog covered a recent decision from the Wyoming Supreme Court. The decision involved a client’s challenge to a firm’s practice of billing in 15 minute increments. The Court concluded that, on the record before it, the evidence supported a conclusion that the firm’s billing practice was not unreasonable.
In its decision, the Court distinguished the case from one it decided in 2014. It’s the 2014 decision that prompted this blog.
The 2014 case is here. The lawyer’s license was suspended 30 days for, among other things, charging an unreasonable fee. More specifically, the Court concluded that the lawyer violated Rule 1.5(a) by billing in 15 minute increments for tasks that, quite simply, did not take even close to 15 minutes to complete.
If your typical practice is to bill in minimum increments, the decision is worth a read. A quick summary:
- An attorney’s use of a minimum billing increment is not, standing alone, a violation.
- Billing for work that was not done is a violation.
- Double-billing for the same work is a violation.
In the abstract, those 3 statements don’t (and shouldn’t) seem surprising.
What’s key is to take a look at what the lawyer did. Remember, per the fee agreement, she billed her client in minimum 15-minute increments. The lawyer wrote down each task as it was completed. If the task did not take at least 15 minutes, she did not record how long it actually took. Thus, every single task was billed as having taken at least 15 minutes. Among other things, the lawyer:
- “routinely billed .25 hours to sign such documents as subpoenas, stipulated orders, and pleadings.”
- regularly billed the client .25 hours for reviewing one-page scheduling orders, one-page pleadings, and one-page letters.
- often billed the client .25 hours to review a document and another .25 hours to sign it.
Again, it wasn’t the minimum billing increment that resulted in the sanction. Rather, per the Wyoming Supreme Court, an attorney’s billing practices necessarily involves application of “billing judgment.” That is, an exercise of professional judgment demonstrated by “writing off unproductive, excessive, or redundant hours.”
On this issue, the Court concluded that the lawyer’s “practice of billing 15 minutes for such tasks as signing subpoenas, stipulated orders, and one page letters demonstrated a complete failure to exercise business judgment, which would have required her to write off unproductive, excessive, or redundant hours.”
To be very clear: I am not telling you that a minimum billing increment violates Rule 1.5(a). I am, however, telling you that at least one Supreme Court has concluded that, if abused, the practice can lead to an unreasonable fee.