Double Billing

posted in: LawFirms, LitigationSupport | 2

I haven’t worked in the legal industry for very long, but I am familiar with the ethical practice of not double billing your time. For example, if you are typing an email to one client, while one the phone with another, you can’t bill them both for that time. Naturally, that’s to encourage you to stop and pay all of your attention to the client you are billing for that time, which is a good practice. Typically, the ethical line extends down to paralegals and others, but it’s unclear if it extends to litigation support. Here’s why:

It’s very, very common for me to have one process, such a Summation load, running, while I’m working on something else. Would it be ethical for me to bill both clients? Now, we get around the ethical question easily enough, we don’t bill for “machine time”. So, even though that load file may take an hour or two to finish loading, I typically only the bill the amount of time I spent setting it up and starting the process.

On the other hand, one of the folks I talked to at the E-Discovery conference in New York suggested that as the very reason he doesn’t recommend law firms process electronic discovery in-house. His argument was, if you only bill your time, and not machine time, then you end up giving away the resources. So, while it may take the better part of the day, and over night, to process discovery documents through a program like IPro’s E-ScanIt, you can’t use that machine for anything else, and all that processing is only a cost, not a revenue generator. I haven’t even mentioned the cost of data storage either, which is getting larger and larger every day. His argument was, for large cases, ship all of that to a vendor and have them host it, then simply turn around and pass that cost directly to the client.

That conversation got me thinking, that we really do “give away” quite a lot of our resources (and that’s even assuming all the hours we bill actually gets billed to the client, and not written off by the attorney), but is that a bad thing, or does it keep costs lower for our clients, which we also kind of like to do whenever possible?

Any way you look at it, there’s no easy answer. What we do now, seems to work for us, but I’m not sure it always will, in every case. We’ll need to be flexible on this and see where each case takes us.

I’d love to hear from some law bloggers, lawyers, or other folks working in the legal industry about how they handle this. Comment away!

Technorati Tags: lawfirm, litigationSupport, LawFirmManagement

2 Responses

  1. Andy

    When I did occasional consulting work in the uk for part time I billed at two levels – one for hands on work where I was fully occupied and another much lower rate for build time for the time it took to wait for a cd to install or windows to install -after all it’s using my resources AND it was also taking up my evening when I couldn’t be out socialising or something because I had to sit at home and put cd’s in etc. If I was on the client site – then it was billable time as normal.

    Back to your situation – how do you know who to bill – if you were on the phone with a client AND installing something some software that was fairly interactive – who do you bill? Both processes are taking up your time. If you drive to a customer site (and bill travel time) and also speak to another client on the phone at the same time whilst driving – who would you bill?

  2. Mike McBride

    Andy,

    Interesting questions, let’s see if I can explain a little further. On site at a client is billed for basically the whole time. If I have to go collect ESI, for example, it’s because the client doesn’t have someone on staff who can do it, thus they get billed for the time and travel expenses. Technically speaking, answering a phone call while I’m there, or even while driving, is not allowed. For safety reasons our attorney’s are advised to not take business calls while driving. Stop and take the call, then continue when you’re done. I suppose, on some level that when it comes time to bill the client for the trip, you subtract out the time you were stopped on the phone. The same would, theoretically be true of taking a call while on site. Incidentally, this is why our attorney’s are encouraged to take a limo back and forth from our Columbus office to our Cincy and Cleveland offices. They can work the whole trip, either on the phone or reviewing documents, billing more than it costs to hire the car for the time.

    The same would hold true if I worked on something while doing an install, I simply wouldn’t count that time in the total. Again, it would count as machine time, not billable. So clients do get that for free basically.

    Your comparison to consulting work is pretty accurate. In your situation though, instead of billing the lower rate for machine time, we just don’t bill it, and use that time for other things. If I needed to “attend” to something during non-work hours though, I think we’d come up with a way to bill some of that, but if I simply leave something running while I go home, no.

    Of course this is all theoretically. I think it’d be safe to assume not everyone would stick to these guidelines exactly as written 100% of the time, but if they push the envelope on it, I imagine it’s in small, subtle ways only.

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