Wednesday, April 17, 2013

Teaching About Billing Clients

Over at the Best Practices for Legal Education blog (April 5), Professor Benjamin Madison offers his thought on a recent over-billing scandal. He also offers an exercise that should encourage law students to be thoughtful when they bill:

In my civil procedure and pretrial practice classes, I have students break into groups to work on projects—e.g., a plan for discovery in a simulated case, or jointly preparing a pleading, a motion, or some other document in the simulated case. When I have the groups do these projects, I now plan to assign them an hourly rate (say, $200 per hour) and tell the student “lawyers” that they must—independent of one another—keep track of the time they spend on the matter. I’ll explain that billable hours are often broken down into increments, such as most commonly a tenth of an hour (or six minutes). I will then have them multiply the time they record by their hourly rate. If the student spends fifteen minutes on the project, I’ll ask whether they will round up to three-tenths of an hour (i.e., 18 minutes) even though they did not spend that much time working for the client. If the student decides that’s fair, then she or he would bill $60.

The exercise should reveal some interesting results. If students keep time separately (as I will insist), my guess is that there will be discrepancies in the amount of time recorded. That will provide an opportunity to discuss the necessity to be careful in contemporaneous recording and developing the habit of recording precisely when one starts and finishes a project or task. Moreover, we can discuss the common practice of rounding up to the next tenth of an hour (the 18 minutes noted above). Although the practice is common, the professor can ask students whether they believe such a practice out to be spelled out in the engagement letter if they plan on doing it. Students then ought to realize that clients are less likely to be surprised or object if they make the practice of rounding up time clear from the outset.


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