Is your lawyer overcharging Part I
February 09, 2013 • By Dennis Beaver
While in their last semester at college, twins Glen and Brad — only 21 at the time — saw a newspaper ad offering a part-time job in “disaster restoration and remediation.” It would change their lives.
“We remember the ad as if it were yesterday,” Glen told You and the Law. “Job duties required long hours in extremely dirty environments that have suffered fire, water or wind damage, working in bad weather, and having good, basic carpentry and construction skills.”
The young men grew up on their family’s farm in Central California and were no strangers to hard, dirty work. They were immediately hired, and quickly learned the meaning of “disaster restoration and remediation.”
“When you see television ads for ServiceMaster or ServPro — called out to a home after a flood or fire — that’s what this business is all about. We help people at some of the worst times of their lives,” Brad told us.
That part-time job blossomed into the disaster restoration company, which the two brothers now own, and employs everyone in the family.
“This is very common in this field, given the physical, time and communication demands of the job,” said Pete Consigli, special advisor to the Restoration Industry Association of Rockville, Md.
Growth opened the door to a thief
“Two years ago we hired from outside of the family,” said Brad. “Our lawyer had everyone sign agreements which provided that former employees would not illegally compete or try to damage us through other improper means.”
“Of course, it’s normal to gain experience and go out on your own — that’s the American way. But cheating your way to success by stealing customer lists or other private company information amounts to illegal, unfair competition,” Glen added.
“Drew was our favorite non-family member employee. He was personable and a great salesman, but after he left us, we learned that he was also a thief, copying all our customer data, contracts, pricing information, everything. And then he went to work for a competitor and began calling our customers, lying about us, trying to lure them away. We had to do something.”
But that’s what you guys specialize in!
Their lawyer referred them to a small Fresno law firm which specialized in unfair business practices.
“We brought every document asked for and spent an hour with the attorneys. They advised us that our situation was ‘garden variety and extremely common’ and they could easily obtain a court order preventing the use of our information as well as other relief. We authorized them to proceed.
“A month later, we received their first bill which, to our amazement, listed four hours of legal research into unfair competition. We hit the ceiling! How do you bill someone for doing research in the area that you specialize in? This strikes us as completely wrong. Your opinion would be helpful.”
It’s wrong to bill a client for what you should already know
We discussed this situation with attorney John Marquess, considered as the nation’s leading expert in attorney fees. He is the president of Haddonfield, N.J.- based Legal Cost Control, which is a firm that audits millions of dollars in lawyer bills every month. He is credited with developing the specialty of legal auditing in the mid-1980s.
“Your readers are justified in being upset, and have every right to challenge those four hours they were billed,” Marquess said.
“When you hold yourself out as a specialist in a certain area of the law, then it is completely wrong to bill a client for doing ‘research’ in what you should already know.
“This cannot be justified, especially when the attorneys stated that it was a ‘garden variety, extremely common type of a case,’ but we see it all the time. It’s extraordinarily common in law firms with many attorneys and hourly billing requirements which often encourage bill padding,” he added.
“An example of charging for what a competent lawyer should already know would be a personal injury attorney researching the statute of limitations in his state. How could you not know that? But we have seen attorneys bill for that ‘research.’ It is just ridiculous.
“Today there is a glut of lawyers all over the country, many with huge student loans to pay. If they can find a job in law, they’ll earn much less than ever in the past. This encourages overbilling,” Marquess stressed.
“But this is not limited to individuals. Where the ‘client’ is a city and there seems to be an unnatural and dramatic increase in legal work performed by a private law firm hired as city attorney, local government has a duty to take a close look at the bills,” Marquess recommends.