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Lawyers' emails reveal the obvious: Attorneys' overcharge
Call it "churning," or "feather bedding." A suit against the world's largest law firm reveals blatant efforts to juice up legal bills.
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Those among us who've had hefty legal bills have wondered why they were so high. There's lots of lingo for that: "Bill padding." "Churning." Even "feather bedding."
With the acknowledgement that the vast proportion of lawyers only demand what they're rightly owed, emails uncovered in a court filing last week suggest some have indeed been gilding the lily.
As one of the attorneys wrote to a colleague, "Churn that bill, baby!”
"You have some incredibly damning statements in these emails, basically acknowledgements from these lawyers at this firm that there were some shenanigans going on in the way they worked," said Peter Lattman, who wrote about the suit for The New York Times Dealbook.
One of the temptations facing lawyers is the billable hour, a standard practice in the legal industry. That is, instead of a flat fee for services, firms charge for the amount of time worked on a case. That provides an incentive to put an excess of lawyers on a wealthy client's case ("feather bedding") or to do unnecessary or irrelevant research ("churn"). Although considered unethical, Lattman's sources estimate that the practices are common.
The firm at the center of the lawsuit, DLA Piper, went a step further in openly acknowledging their efforts to churn legal bills. With 4,200 attorneys, it's the world's largest law firm. In other words, plenty of people to add to a case if needed.
And an extra hour here or there may not sound like much, but prestigious corporate firms can charge in excess of $1000 per hour, according to Lattman.
For more on the background of the case, and the disgruntled client who refused to pay his $675,000 legal bill, check out the full column at the New York Times Dealbook.
This story is a confirmation that overbilling is not only rampant in the US but seems to be systematic in some companies. The tone of the emails that were exchanged between the attorneys suggests that bill churning was a standard practice at the firm. DLA Piper’s mistake was that its lawyers were careless enough to put their intentions into writing. The problem of overbilling will not go away until clients find ways to create transparency and protect themselves against billing fraud. We have been thinking about and working on solving this problem for many years. In 2008, we developed a program called www.TransparentBusiness.com mainly to protect ourselves against being overbilled by our many remote service providers, which included lawyers, writers, and programmers among others. This web-based application monitors remote work in real time, providing supporting screenshots every 3 minutes and generating accurate status and cost reports for every active project, task, or case. We’ve had great success with this program and last year decided to make it available for free to individuals and small businesses and, for a modest fee, to larger companies and corporations. To see how TransparentBusiness protects clients against overbilling, check out this short video: http://www.youtube.com/watch?v=VocWYCKWurg&feature=player_embedded
A lawyer dies and goes to heaven. He meets St. Peter at the gate. St. Peter looks at the lawyer and say's "You really have not been that bad of a guy. However before we let you in to heaven, we are going to send you to Purgatory for one year for every year you spent on Earth. That will be 389 years". The lawyer looks back and says" There must be a mistake, I died when I was 67". St. Peter looks at the lawyer and says " We are going by your time sheets"
