Thoughts Regarding Legal Billing Practices
Lasher Holzapfel Sperry & Ebberson (Client Service Document)
Ronald E. Braley

From time to time, our clients have raised questions regarding billings and we thought you might be interested in some of our answers:

Why does legal service cost so much?

Actually, it is a bargain compared to many other services, but it seems expensive because of the amounts of time involved and because generally it is uninsured. There are many costs which are not obvious: a considerable behind-the-scenes staff is required to support the work done by our attorneys and paralegals.

What is covered in the hourly rate?

The basic rate covers attorney or paralegal time, the cost of facilities, support staff, accounting, law library, and similar expenses.

What expenses are charged extra and why?

Some clients do not need all of the available services, or they use them at higher levels than others. Rather than including them in a significantly higher billing rate, these variable services are separately billed. Examples of such charges include: photocopy costs, telecopier costs, messenger expense, computerized legal research, express mail, long distance telephone charges, extra ordinary postage, and travel expenses and other out-of-pocket costs.

Why aren’t these costs covered by fees like physicians do?

Physicians and dentists generally charge fees that are 150% to 200% higher than legal fee rates. Their fees seem smaller because: 1) they are for shorter periods of professional time, and 2) they are usually paid by insurance companies. It is not fair to charge one client a much higher rate because other clients use extraordinary amounts of some types of services which cost more. The courts supervise fees in certain cases and require that such costs be separately stated.

Why do lawyers bill for telephone calls?

We usually do not bill for telephone calls relating to scheduling, fee inquiry, complaint or praise. We do bill for calls which are in lieu of “in person” meetings and which result in decisions being made. Such calls are an efficient way of doing business. Our business is generally the sale of advice or information and often a telephone call is the most cost-effective means of communication.

Why do I get bills before the work is complete?

Legal projects, even smaller ones, can stretch out over several months. It is our policy to bill every month as the work is completed both to keep clients advised of what has been accomplished, and to assist them in budgeting the cost. Occasionally, bills will be held until a project’s completion.
Why do I sometimes get bills long after the work is completed?
Often there are expenses that we advance and then bill back to our client, where we do not get the invoice until well after the completion of the project. In other cases, the project may appear complete but, in fact, there is work which needs to be done to make sure all loose ends are tied up and that the project is properly documented.

Why shouldn’t I have the work done elsewhere cheaper?

Comparing “bids” for legal services is often difficult because of differing attorney billing rates, expertise and efficiency. Price comparisons can best be made only between lawyers of comparable skill and experience. It is possible that there are others who will do the same work with the same quality for less money. However, we can assure that we strive to provide the highest quality service at a cost-effective price.

Why should I pay your bill, when the same work was done by my accountant?

A common mistake is to assume that your accountant will provide all legal documentation for business transactions. The best business relationship among your advisors is where the attorney and accountant work together, each providing the services he or she does best, while ensuring that the “big picture” is kept in view and that nothing falls through the cracks.

What have I bought when I have paid for legal services?

This often perishable commodity, legal advice and documentation, should be looked at in the same light as insurance premiums or counseling charges: you are hiring a professional for a brief period of time to either write an insurance policy (of sorts) or to provide guidance in dealing with a complicated world. In many cases, you have also bought an enduring product, a legal document, which should have elements of both.

Why did you charge me for what I already knew?

Even though our opinion letters sometimes appear to simply confirm the obvious, our role in such instances is to confirm that client assumptions are legally correct.

We occasionally receive complaints when we must write an opinion that is contrary to our initial thoughts on the matter and to our client’s desires. In those cases, our role is to provide answers to our clients’ questions, which sometimes confirm that what was originally desired has a risk beyond acceptable norms.

Why did I receive a bill for work I did not authorize?

We strive to have written engagement letters covering all matters for all of our clients and to communicate frequently with our clients. For various reasons, this is not always possible. Much of our work involves the exercise of judgment. We often are in a position where we believe that something must be done to protect your interest even though you may not have specifically authorized the work. Such work is of value to you, and we believe that we are entitled to be paid for it. If the work was unnecessary or duplicates the work of others, then you should not have to pay for this unless there was no reasonable way for us to know. We believe that you would rather have the protection of some redundancy rather than risk an omission or other error because insufficient attention was paid to your legal affairs.



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