The Billing Abuses of Lawyers
It's sometimes easy to pick out the most extreme examples of bad behavior and claim they are "proof" of widespread abuse.4 min read
from The Moral Compass of the American Lawyer
by Richard Zitrin & Carol M. Langford
Ballantine Books, 1999
The Case of Webster Hubbell
It's sometimes easy to pick out the most extreme examples of bad behavior and claim they are "proof" of widespread abuse. But there are so many anecdotal accounts of incredible billing abuses by lawyers that it's hard to choose among them.
Perhaps the most well-known recent case is that of Webster Hubbell, a former chair of the Arkansas Bar's ethics committee and a partner at Little Rock's prestigious Rose Law Firm, who went from number three in the Clinton Justice Department to prison. Hubbell was convicted of stealing $394,000 from his clients and his own law firm by billing for time he never worked, and claiming that personal expenses -- including purchases at Victoria's Secret and a fur salon -- were business-related.
Other Cases of Billing Abuse
Hubbell is hardly alone. Another flagrant example of gross billing abuse involved a prominent Chicago lawyer in a large and prestigious firm who averaged 5,941 billable hours per year over four years. That's an average of sixteen hours and twenty minutes per day, every day, 365 days a year. The lawyer claimed to have never taken a day off in four years. But every lawyer must remain current on the law, go to firm meetings, and stay in touch with clients to keep and develop business It's impossible to convert every second into time that can be billed to a client.
Carl T. Bogus, a longtime Philadelphia practitioner who recently turned to teaching law, calculated that if this lawyer met "the standard assumption" that at most, only 70% of work time can be turned into time billed to a client, "this lawyer needed to work 23.3 hours per day, 365 days a year, leaving just enough time for a round-trip commute home but not enough time to enter the house." Yet, the lawyer's partners remained silent until an anonymous source furnished reporters with the lawyer's billing sheets.
Billing abuses are by no means limited to excesses at our largest firms. A small firm Kansas attorney reportedly charged the State Workers' Compensation Fund an average of 33 hours a day for one ten-day period. An auditing expert uncovered a Southern California lawyer who had billed a single client for 50-hour workdays and a New Orleans firm that routinely billed four hours for letters a single sentence long.
Punishment for Billing Abuse
Despite these extreme cases, lawyers -- with the notable exception of the high-visibility Hubbell, whose prosecution stemmed from the Whitewater investigation -- are rarely punished for billing abuses. Raleigh bankruptcy attorney Mark Kirby was indicted in federal court on 16 counts of billing fraud. Among other offenses, he billed 90 hours in one day. Between June 1990 and July 1991, Kirby billed a total of 13,000 hours, even though that 13-month period, calculated at 24 hours a day seven days a week, was only 9,500 hours long. Yet Kirby's trial resulted in a hung jury. His defense: everybody does it.
Kirby eventually pled guilty to one count and was sentenced to 15 months. Hubbell received 21 months in prison, though one former Arkansas Supreme Court judge argued it was unfair to single out Hubbell when billing fraud is so common and so rarely prosecuted. Indeed, the justification that "everybody does it" is widely used in the legal community. "The problem is not so much the behavior of one lawyer" says Professor Bogus, "as it is the conduct of the firm."