When billable hours go bad ...
If there's one topic we know all lawyers love, it's the good old billable hour. And while we may say this with an ever-so-slight hint of sarcasm, we have decided to pay homage to the
If there's one topic we know all lawyers love, it's the good old billable hour. And while we may say this with an ever-so-slight hint of sarcasm, we have decided to pay homage to the oft-maligned subject of time billing by giving a few examples of exactly why, for some, billable hours might not be such a great idea. Here are our top five.
What? There's only 24 hours in one day?
An American lawyer, Kristin Ann Stahlbush, was suspended earlier this year for, quite simply, working far too hard. Now, while grit, ambition and a willingness to burn the candle at both ends wouldn't ordinarily be an offence, Stahlbush raised some eyebrows when her time billing averages equated to her having worked about 100 hours a week, every week of the year.
Stahlbush even billed the local court by whom she was appointed for more than 24 hours a day on several occasions, including five bills for days containing more than 20 hours of work. Unsurprisingly, Stahlbush was investigated by the Ohio Bar Association and suspended for two years.
What's the secreat? Victoria's Secret
Dodgy billing practices are certainly not a new phenomenon, and even high-profile and apparent pillars of the community have been brought down for stretching the six minutes. Webster Hubbell, a former Arkansas lawyer and politician, who also served as mayor and was appointed by Bill Clinton as chief justice of Arkansas State Supreme Court in 1983, went from holding this prestigious post in the Clinton Justice Department to, well, prison.
In 1995, Hubbell was convicted of stealing almost half a million dollars from his clients and his own firm by billing for time he had never worked, and spending up big on fur items and lingerie at Victoria's Secret then flogging it off as a work expense. Hubbell was sentenced to 21 months in prison, though one former Arkansas Supreme Court judge argued it was "unfair" to single out Hubbell when timesheet fraud is so common amongst lawyers, yet so rarely prosecuted.
Oh dear, Clifford Chance, oh dear ...
In 2002, UK law firm Clifford Chance was cast in a dubious light when someone leaked a memo being highly critical of, amongst a swathe of other things, the firm's annual billing target of 2420 hours. Now, that's a lot of hours in one year, especially if you want to take holidays and not work weekends. In fact, it equates to almost 11 hours a day when you take out weekends and annual leave.
So, here is an excerpt from the leaked memo - no explanation needed: "Associates stated that the requirement is profoundly unrealistic, particularly in slow areas of the firm. Moreover, associates found the stress on billable hours dehumanising and verging on an abdication of our professional responsibilities insofar as the requirement ignores pro bono work and encourages "padding" of hours, inefficient work, repetition of tasks, and other problems. Associates expressed concerns that the requirement promotes misallocation of work to senior associates who "need" the hours when less expensive junior associates could do the work. Associates also stated that partners care only about associates' billable hours."
Dodgy divorce lawyer caught by putting foot in mouth
An American lawyer found herself in the midst of a billing scandal after she represented a husband in a divorce. Once the matter had ended, the lawyer gave the husband a detailed bill of the hours she had worked on the matter. Soon after, the wife called up the husband and asked if she could have a look at his bill to compare it to hers. It soon emerged that the wife's lawyer had billed twice as many hours for the same deposition, and twice as many hours for court attendances, than the husband's lawyer. In short, the wife's bill was double the husband's.
Unfortunately for the wife's lawyer, he got caught. How? He let slip to the wife's father, the day before trial, that "we have to settle because I didn't prepare for trial." But the matter did go to trial, and lo and behold the wife's lawyer billed her for 10 hours of "trial preparation". The wife pointed this out and she was promptly refunded the money.
Keddies and other compo rip-offs
Australia, of course, is not immune to dodgy billing practices, with a few high-profile cases emerging in the last couple of years. Foremost amongst them are the Keddies investigations, in which numerous clients of the firm have come forward and said they were, amongst other things, not told about their settlement details, not given itemised bills - or any bills at all - and were overcharged.
In one particular case, 80 per cent of a client's compensation payout went to the firm in legal fees and other expenses. Other claims included being charged $60 for a client welcome letter, a $49 fee for reading a client's thank-you card, and multiple billing of clients for the same expenses. There were also cases involving clients in Asia, a number of which were settled for around $300,000, with the firm taking a helping of about $250,000. Many of the complaints against Keddiess disappeared and the firm is known to have repaid at least some of the overbilled amounts.
Then, of course, there is the ongoing case of David Forster, the lawyer who acted for victims of the Navy Voyager disaster. Justice Karin Emerton in the Victorian Supreme Court recently said Forster's former firm, Hollows Lawyers, had committed "serious irregularities in relation to trust money". Some clients had their disbursements billed twice, final statements were not sent out, discounts from barristers were not passed on, and the firm billed different clients for the same work. Some billing even went beyond 24 hours a day. Despite this, the judge found that the breaches were not deliberate. He had, apparently, simply paid insufficient attention to detail when trust accounting and was "unduly hasty" in taking his professional fees.