Tuesday, December 12, 2006

Procrastigrading or Procrastiblogging? Solomonic Reflections on Block Billing

It's sitting there.  The stack.  Waiting to be graded.  Why does the trip to Bed Bath & Beyond seemBedding so urgent now?  How does one accessorize bachelor-living squalor?  Why is there air?  What is a tort?

On a lighter note, the Wall Street Journal yesterday reported on the request by two congressmen that the Justice Department look into the billing practices of some of Amtrak's outside law firms.  In particular, the firm of Manatt, Phelps & Phillips LLP is said to have engaged in block billing, "in which they lumped tasks under one entry of an invoice, rather than itemizing the cost of each task.  Block billing is prohibited by Amtrak, according to the report."

Let's review the bidding here.  Nobody is accusing Manatt of falsifying the bill.  Indeed, Manatt is not even being accused of sending the lawyer's dream bill, which says only:  "For Professional Services Rendered:  $1,000,000."  No, the issue here is "block billing," which I presume means something like the following entry:

Drafted acquisition agreements.  Reviewed due diligence material.  Conference with client re due diligence material and deal issues.  Review and revise Hart-Scott-Rodino filing.      4.2 hours.

At my daughter's wedding this weekend, I got to be chatting with a couple, both lawyers, who are among our oldest friends.  He, call him Solomon, is a corporate lawyer in a mid-sized firm outside Detroit; she, call her Sheba, is on the general counsel's staff at one of the largest health care systems.  Sheba and I were trying to explain to Solomon what we, as general counsels, wanted and didn't want from outside counsel.

1.  We don't want lunch.
2.  If we want to be your friend, we will let you know.  Don't call us, we'll call you.
3.  We want to be able to know how much work-in-progress you have accumulated on a hours' notice, and have it accurate through the preceding day.
4.  We don't want to hear how difficult it is to get your lawyers to record their time on a daily basis so as to accomplish #3.
5.  We don't want financial surprises, like getting a bill on December 15, showing time from the first week of November that goes over your budget by $500,000, and is actually significant enough to impact our reported earnings.
6.  If truth be known, we really don't care what the time entries say if the total amounts comport with our heuristics about the value of the services.  If we want a discount, we have far more direct ways of getting it than ankle-biting about the entries on the bill.

Never once did the subject of outrage over block billing, standard fare from my days as an hour-biller, come up.

[Jeff Lipshaw]

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Comments

I am the trustee of my mother's estate and have 500+ emails dealing with trust issues over the past 9 months. I have run them off in chronological order. Things were going so fast (working and being trustee) that I really didn't take the time to bill for them. However, I DO have the documentation. I usually bill in increments of 0.1 hours. My question is, how do I accurately assess the time I spent reading other's e-mails about the trust issues and the time I spent writing a response or generating a new e-mail? A lawyer friend of mine says any e-mail he gets is automatically a 0.1 as you must consider opening the email, reading it, thinking about it, responding to it and then filing it away in one of your e-mail folders. Some of my e-mails are quite long and detailed. Is there a standard billing time for the number of lines read or written? For example, is a 12 line email that I read worth a 0.2 and is a 12 line email I write worth more because of composition and thinking time, say a 0.3 ? If you can't answer these questions, please advise me where I can go to get a professional opinion (ABA?) that I can attach to justify my billing the trust for all these emails. I am not trying to inflate the billing, I just want to be paid a fair market rate for my services and all the time I've put in to being the trustee. I am not a lawyer-just a very detailed, responsible trustee that has all the authority, all the responsibility and ANSWERS TO EVERYONE! I will never do this job again-no matter how much you pay me (well, I can be bought I guess but it would have to pay very, very well!)

Posted by: Kelly Bracken | Oct 20, 2007 10:19:33 AM

Most attorneys who are paid hourly bill in increments of .10 hours. If a task takes 6 minutes or less, it should be billed at .10. If it takes 6-12 minutes, it should be billed at .20, and so on.

Be realistic with your time - it's hard to swallow a charge of more than 6 minutes for a 12 line email. If it requires research, thoughtful deliberation or a response, those should billed separately.

Posted by: David | Oct 22, 2007 10:04:32 AM

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