The Bar Goes After A Contract Attorney For Overbilling – Hypocrisy Or The Right Move?

Overbilling has always been a problem in the legal community among law firm associates, law firm partners, and even contract attorneys alike. Such matters have traditionally been either overlooked or summarily resolved internally due to the prevalent nature of the practice among all tiers of law firm practice from top to bottom. However, rather than starting at the top and addressing the pervasive padding and markup fraud among the high priced partners and associates at many of the big law firms, the disciplinary arm of the Illinois State Bar has decided to target one particular contract attorney for his indiscretions, sparking debate and denounces of hypocrisy.

According to the official bar complaint, the respondent contract attorney signed an agreement with Ajilon Legal Staffing to perform contract attorney work for the law firm of Mayer, Brown, Rowe & Maw. The contract attorney was staffed onto a document review project that paid $35 per billable hour. His work was performed on an online document review system that presumably tracked his review activity. During the 2 week working period, the respondent submitted time sheets presenting that he worked a total of 135 hours. However, it was later allegedly discovered that he had only actually worked 51 hours and 45 minutes, quite a large discrepancy for such a short period of time. The complaint indicates he was paid $4,725 for his time sheet hours, but that he fraudulently overbilled by $2,913.75, improperly inflating his billable hours by more than 84 hours during that 2 week period.

My Thoughts – Yes There Is A Lot Of Hypocrisy Going On, But Unethical Behavior Is Still Wrong

As a preliminary matter, I think official bar sanctions against this contract attorney would be perfectly warranted if the facts are found to be true. If the allegations are verified and confirmed, it’s difficult to offer him much sympathy due to the specifics of the facts, although I personally feel the case should have been resolved internally. He allegedly overbilled by more than 84 hours in a 2 week period! We’re not talking about tacking on a lazy 1 hour or rounding up to the next 30 minute mark every day. The attorney overbilled by more than 10 full working days, an astonishing number. Calling him a modern day Robin Hood because he robbed from the rich (big firms and agencies) to pay the poor (um, himself?) is a tad misguided. We can find better ways to boost the wage rate and increase project compensation than performing such unethical activity. It’s not that I’m preaching against such activity, I just feel such activity undermines our objectives completely and only serves to make contract attorneys look even worse than some already view us.

However, I’m curious as to what motivated the Illinois State Bar to tackle on this particular case when there are much bigger fish to fry among the denizens of the large law firms where overbilling is a frequent way of life. For example, I’m currently on one of those projects that keeps getting dragged out with little end in sight. After a few conversations with the managing associates, it seems the law firm partners are in no hurry to rush the case so long as they can continue raking in the billable hours. I got the unspoken vibe from the associate that she had no problem with us dragging out our review and continuing to let the firm bill the client, a company that has continued to pay its legal fees without much protest.

If the various state bars wanted to tackle this growing billable hour inflation issue, rather than going after contract attorneys, their resources would be better served going after the chief operators, the law firm partners and senior associates that cave to the pressure of generating billable hours and profits. There is truly a lot of strange hypocrisy going on today in the legal world where deceptive markup practices are prevalent, but its members still talk about fair compensation and billing. While contract attorneys like myself are sometimes offered little in terms of professional movement and prestige – having to fight and scrape for every project and permanent offer opportunity, we are still expected to abide by the high strict standards of professional conduct among full fledge attorneys.

Articles like the ones discussed help to serve as eye openers for contract attorneys. Document review programs do use sophisticated metrics to track worker productivity and usage statistics, so if the firm wanted to, it could certainly verify the accuracy of billable hours. If you do things like round up your hours, it’s important to at least be cognizant that there is indeed a digital trail that is retained. Most cases do seem to go unnoticed, but outrageous violations are bound to be caught – such as the story of this one guy who decided to straddle two different staffing agencies that were staffing the same project. He somehow ended up being separately assigned to the same project location by two different agencies who were unaware that the other agency was also staffing him. The contract attorney ended up collecting two pay checks for some time but was eventually busted. I don’t think bar sanctions were levied but he was summarily let go. Fortunately for him, he was not working or barred in the state of Illinois.

11 Responses to “The Bar Goes After A Contract Attorney For Overbilling – Hypocrisy Or The Right Move?”

  1. JDWired Says:

    Associate salaries are approaching $200K and CA hourly rates have remained stagnant for years. But the way to effectuate change is definitely not by stealing. I have a lot to say about this — offline!

  2. Split Decision Says:

    I agree with your comment that “there are much bigger fish to fry among the denizens of the large law firms where overbilling is a frequent way of life.” Contract attorneys make on average $35 an hour. That’s hardly anything compared to what they’re billed out to the client (which I’m assuming is over $150). Associates and partners overbill all the time – that’s the nature of the business. So, I don’t really understand why they’d go after this contract attorney for a few thousands of dollars, when associates and partners overbill frequently, which probably costs the client way more than what this contract attorney overbilled for.

    Having said that, I think contract attorneys do have an ethical obligation to try to bill as accurately as possible. What this contract attorney did was blatantly egregious…however, I don’t think they needed to resort to suing the contract attorney. Like you said blogger, it’s major hypocrisy…Firms, associates, partners – they all overbill. Who’s watching them, and keeping them accountable?

    In my opinion, I think it’s about time that contract attorneys get paid more. The pay has been stagnant for too long, as JDWired mentioned. The people who are pocketing the most from contract attorneys are the firms and the agencies. I think there’s a serious imbalance there. Is there any way to get rid of the middlemen?? Or, is that impossible?

  3. noman Says:

    Staffing Agencies falsify candidate credentials. (view link)

  4. Scott Says:

    There is no excuse for cheating or fraud. Period.

    However, neither is there an excuse for any law firm to pay their “contract attorneys” $35.00 per hour but turn around and bill the client 7x that amount. And, it does not matter that law firms “have to make a profit”. If they cannot make a reasonable profit with the usual mark-up of 3x the salary, they are mis-managed. And, if the “contract attorney’s” REAL worth to the client is $210-$240 per hour, then the “contract attorney” should receive, as his or her pay $70-$80 per hour. The fact that the law firms choose to “hire” the “contract attorneys” through an “agency” is beside the point. That is how the law firms have chosen to organize their business … they don’t have to use outside agencies to do their hiring for them. And, if they do, the cost of using those outside agencies must come from the law firms’ profit pool, not out of the “contract attorneys'” wages.

  5. Edward Smith Says:

    Personally, I think we should start turning in the law firms….and you all know what I mean.

  6. vania Says:

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  7. Dave Clark Says:

    There’s a lesson to be learned by large institutional clients.

    Many years ago we observed a law firm in California that had set up a computer generated report which tracked the daily billings of each attorney. The report showed how many days during each month and year individual attorneys billed 10+, 15+, 20+, even 24+ hours on a given day. The managing partner thought it was a good tool to keep track of productivity.

    A quick look at the report clearly showed that some attorneys were simply billing far too much. One junior partner had 25 or so days in which he’d billed more than 24 hours, as much as 40+ hours one day. The total was well over 4,000 for that year for the one fellow.

    Somehow, the report’s page for “junior partner” with the astronomical hours found its way to a major client, which promptly audited the firm’s billings and demanded copies of the report for every attorney working on that client’s business.

    The law firm lost that million-dollar client, and thence began a slide to failure and dissolution.

    Clients can stop this attorney over-billing if they choose, but it takes some gumption and determination.

    Dave

  8. LEX JUSTIS Says:

    I dont know… I think a man has the right to charge what he wants and his client has the right to accept or refuse his services if he feels that he has been overbilled. Did the State Bar over stepped its legal jurisdiction by interfering in the business between a lawyer and its client?

    I am not sure what clients do in the US, but Im in The Bahamas and the legal business is slightly more flexible. I would advise clients to use common sense and to exercise caution with the like of any professional who does not exercise fixed rates. Get an idea on how much time the lawyer will take on a legal matter. Compare rates with other attorneys if you can. Or find an attorney that will agree to a set fee for services.

    Lawyer – client agreement are no different than other professional services. I can not agree with the State Bar..

  9. Smart Ideas Says:

    If you think you are overbilled by an attroney, read this article: Defense against overbilling lawyers(http://www.ideas-smart.com/node/28)

  10. Michael Says:

    If you agreed to a certain set of rules, then you have to go along with those rules.

    But, why do we continue to fall in to those same idiotic rules? Sadly we’re stuck in this hellhole called the billable hour, which is about the least accurate way possible to measure the value received by the client. We’re not making sprockets here folks, we’re using our minds, and that’s not measurable by time.

    Those who are honest are screwed.

    Those who find themselves moving from matter to matter, sometimes able to stop for only a few moments at each matter, find themselves with hours of unbillable time (and are screwed).

    Those who manage to bill a bunch of time to the first client who asked for something, and then bill a fraction of that going forward to each of the subsequent clients who need the same thing, since the first client paid for the work that can be re-used, are screwed. (And, so is the first client!)

    Those who stare aimlessly at the monitor for hours on end, hoping for inspiration but letting the clock run, are committing fraud.

    Those who feel it’s justified to determine a measure of value and then work out the hours needed to get to that amount are committing fraud.

    Remember — Those who commit fraud in my examples aren’t doing so because the client isn’t being asked to pay a fair price for the value received — They commit fraud because they try to make something fair without going back to restrike the bargain that was struck with the client — To bill for hours actually worked with no allowance for downtime or anything else.

    I’d hate to think that we as a profession can’t do something better than the same old same same. We’ve failed miserably, and I suspect largely because most of those who are succeeding in the profession are willing to commit billing fraud (and there’s no incentive to catch them).

  11. Eric Says:

    If an attorney suspects that one of his associates is overbilling, is the first attorney required to report it? What does their code of ethics say about it?


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