Billing Basics
If your billables for a document project amount to $30,000–which is about the same price as a C-Class Mercedes–it’s probably too much.
“I don’t know of any client willing to pay that amount,” says Cordell M. Parvin, a partner at Dallas’ Jenkins & Gilchrist in charge of attorney development and training. That is why associates should ask the supervising attorney how much time the project requires, he says, before they start to do any work.
“These kinds of discussions need to take place on the front end, not the tail end,” Parvin adds. Although the firm has a process to write off excess time spent on a matter, “It’s not thought to be a good thing.”
But sometimes the question is not an easy one. Associates who want to look like they know what they’re doing may even underestimate their billable hours on a project, to give the appearance of being efficient.
“That’s not the way young associates ought to handle the situation,” says Michael A. Vercher, a fifth-year associate at Christian & Small in Birmingham, Ala. “Each research project is different, and I think partners realize that each one is individualized and has nuances.”
A lot of clients refuse to pay for certain kinds of work, Vercher adds. Some won’t pay for research, for instance, or for travel time. Consequently, at his law firm associates write down all time spent on a matter, knowing the supervising lawyer will probably edit it. Ideally, Vercher says, partners should review bills with new associates each month, so they can see how the law firm billed for their work. At the same time, partners can point out where associates’ work is inefficient, and tell them what the client would and would not pay for.
“That is a perfect-world scenario,” Vercher says. “I think everybody is so busy that what ends up happening is the associate learns over time about those things.”
The Real Article
Robert B. Hubbell, the firm-wide managing shareholder at San Francisco-based Heller Ehrman White and McAuliffe, says showing client bills to associates is a good learning tool. “Typically, young lawyers don’t have many questions about billing, in terms of substance,” says Hubbell, who practices in the firm’s Los Angeles office. “That’s because early in their careers I don’t think they understand how the bill is presented in the context of the client relationship.”
Hubbell’s firm also teaches new lawyers each year how to write clear, concise billing memos. “You could be describing what you’re doing in so much detail that it would become meaningless and opaque to the client,” Hubbell says. “Also, it can be so brief that it’s cryptic.”
Others invite clients to speak with associates. Parvin’s firm does this quarterly. Inevitably, clients will talk about the types of billing that are bound to cause irritation. Some examples are billing associate time for making copies, or charging for the time of three lawyers discussing something, with each billing different amounts. And don’t even think–or ask–about billing for that brilliant idea you came up with at the gym, in the shower or on the drive home. “I think our associates know better than to ask such a question,” Parvin says.
“I told our summer associates yesterday that any lawyer worth his or her salt is going to spend 2,500-plus hours on his or her work, and part of that is at the gym when it’s not billable,” he adds.
Index cards, with billing tips, are handed out to young lawyers, and more-senior associates lead an orientation session on the topic.
“For lack of a better title, we tend to call it ‘Mistakes I’ve Made in Billing,’ ” Parvin says. “We give real-life examples of entries. More than anything else, if clients read the [entries] they would never pay for it.”
