When providing legal services, clients are billed by the hour for time put into their case. Time spent by their lawyer, legal team, and support staff is valuable and calculated through billable hours. Of course, when time is money, ethics becomes an important element of the billing system.
Most lawyers and legal firms do their best to accurately track their time and properly allocate billable hours to each client’s case. However, any combination of procedural or technological mistakes can lead to unethical billing incidents. In these situations, clients are billed for time that was not effectively dedicated to the pursuit of their legal needs.
We will discuss the most common legal billing mistakes and the ethics in legal billing to consider for accurately recording billable hours for each client.
Overbilling for Legal Hours
Overbilling involves charging a client for more legal hours than were dedicated to their case. While there have been instances of intentional overbilling to get more money from a client, it is more commonly a mistake in record keeping or a translation of time tracking into the billing system. Overbilling goes directly against the ethics of a legal practice, where trust must be established between a client and their lawyer to achieve mutual goals.
If a client can’t trust their lawyer or law firm to bill them with integrity, how can they entrust them with their legal concerns, private information, or important cases? It is vital to audit all billing procedures to ensure that time is accurately recorded and invoiced so that clients are billed for exactly the right billable hours as were dedicated to their case each billing cycle.
Double Billing a Client’s Hours
Double billing is usually a clerical or software error. It can occur when the billing system processes a client’s billable hours twice, effectively billing them double the value of the hours dedicated to their case. Double billing can occur if billable hours are sent twice to the billing system or due to a fault in the billing system itself when hourly records or invoices are generated.
Fortunately, double billing is also among the easiest to identify in a billing audit, as the number of hours and invoice amount will be identical. Double billing can also be spotted when two invoices are generated for a client within a single billing cycle.
Allocating Hours to the Wrong Client
Poor time tracking accuracy can lead to billable hours being invoiced to the wrong client, even if the number of hours billed adds up correctly. To maintain a full roll of clients, lawyers often pursue work for several cases each day. This allows them to make progress on multiple cases and avoid losing time when waiting for paperwork processing or message returns on any specific case. Of course, this means that billable hours may be created for several clients, and the exact amount of time spent on each case in a day matters.
Lawyers need a clear and precise system to mark when they transition from work for one client to the next, and to track the exact hours dedicated to each client throughout the day.
Estimated Billing for Untracked Time
Another problem that arises in ethical billing is when billable hours are untracked. A lawyer may know they spent some time on a client’s case, but without time tracking tools, they find themselves estimating just how much time was spent. This can lead to bias-driven estimations and regular overbilling if untracked time becomes routine. Even a single instance of billing estimation is in an ethical gray-area, as it may be impossible to determine later – or provide records for – just how much time was truly spent on each client’s case during a billing period.
One of the biggest risks of untracked time is time spent away from the computer. Access to an integrated time tracking mobile app can help lawyers to create a habit of always tracking time spent both in and out of the office, in consultations, in court, or addressing a case’s unique needs so that all time spent on each case is documented without missing or estimated time.
Billing for Unproductive Time
Billing for unproductive time is one of the greatest challenges in legal billing ethics. Lawyers often start the time clock on a billable hour when they begin a task. However, if that time winds up being spent on unproductive or unrelated tasks, it becomes unethical to complete the log and bill the client for the time. For example, if a lawyer begins work on a client’s case, but then gets called into a meeting in the office, this is officially unproductive time.
Even more complex is if a lawyer then takes a call relating to another client’s case. This can cross-contaminate time tracking entries so that time spent on one case might be accidentally recorded for another. Because of these complications, lawyers need the ability not only to quickly switch the tasks they are tracking time for, but also to edit time tracking entries after they are created, if an error such as the recording of unproductive time assigned to a client’s account.
Maintaining Accuracy, Transparency, and Integrity in Legal Billing
Maintaining integrity in legal billing requires accuracy and transparency through time tracking tools. Lawyers benefit considerably from software that allows them to track the exact amount of time they spend on each client’s case and quickly change tasks in their daily workflow. Access to a mobile app for time tracking makes it easier to track time that is not spent at their desktop computer, such as client consultations, time in court, chasing down paperwork, or work out of the office. The ability to easily edit time tracking records makes it simple to correct any mistakes such as unproductive time or a failure to switch task tracking at the right moment.
It is also essential that time tracking connects directly to the law firm’s billing system, providing both lawyers and clients with a transparent record of the hours worked on each case and for each billing cycle.
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