ARTICLES

WHY DO PEOPLE HIRE A LAWYER OR LAW FIRM

John J. Marquess, Esquire
President, Legal Cost Control, Inc. (www.legalcost.com)
Copyright Legal Cost Control, Inc. 2013

Why do fools fall in love? Why do birds sing? Life is full of mysteries.

Lawyers believe that everyone needs a lawyer for everything in life. Lawyers say, “Hire me and I’ll set you free![1]” People actually hire a lawyer because the lawyer possesses something that the non-lawyer does not: a license to practice law.

“Practicing law” used to mean work performed by attorneys admitted to practice. Eons ago (the 60’s and 70’s), Law Firms were made up of Partners, Associates and Legal Secretaries-this was the traditional “Triumvirate” of law firms[2]. Legal secretaries aspired to work for Partners. Associates aspired to become Partners, and Partners aspired to become rich and then retire.

Sometime over those years, the Bar bent to allow Paralegals to assist lawyers in the practice of law. The precise issue of who can be designated as a paralegal is not well-defined. Consensus is a “Paralegal” assists attorneys in their delivery of legal services. Through formal education, training and experience, these individuals have knowledge and expertise regarding the legal system and substantive and procedural law, which qualify them to do work of a legal nature under the supervision of an attorney.

Law firms decided they no longer wanted to pay fair market value for paralegals but still wanted the same revenue by taking unqualified personnel/secretarial/clerical staff and designating them as “paraprofessionals” or “legal/litigation assistants.” Work previously done by them at no charge to the client because same was included in the hourly rates, is now producing billable hours.

Firms hire newly minted college graduates – with no legal qualifications whatsoever- and anoint them “paraprofessionals” or “legal assistants” and bill them at professional rates in the $30 to $300 per hour range. What part of the college major in Anthropology, Greek or English, for example, qualifies these people to be designated as “Paraprofessionals?” They are neither “Para” nor “Professionally” educated. Clients should not pay professional rates for non-professional personnel.

The only way to combat this is to know the qualifications of all personnel working the client’s matters. Request the CV’s/Resumes of anyone not identified as an attorney.

Law firms today do not practice law on behalf of a client but instead practice the business of law on behalf of the firm. Firms no longer consist of admitted attorneys practicing law on behalf of clients but consist of Senior Partners, Equity Partners, Non-Equity Partners, Of Counsel, Associates (First Years, Second Years, etc.). The client must approve of these people working the case.

How about the rest of the people now being billed to clients: Non-Admitted Attorneys (or as non-attorneys like to say, “People who can’t do any more than I can do”); Paraprofessionals, Librarians, Clerks, Senior Clerks, Document Clerks, Calendar Clerks, Technology Personnel, Technology Specialists, Data Clerks, Data Entry Clerks, Litigation Support, Project Assistants, Special Project Assistants[3], Temporary Project Assistants, Research Paraprofessionals, Summer Associates/Law Clerks, Other Paraprofessionals, Public Relations Specialists, Database Personnel, Contract Personnel…the list goes on and on, is fluid and changes almost daily, and is universally undefined.

The old Triangle of Partner-Associate-Legal Secretary is long gone; the geometric equivalent is now a Polygon (go ahead, look it up).

One thing is certain: these folks have nothing at all to do with why you hired the Lawyer or Law Firm-to practice law on your behalf. This cast of characters instead merely represents an opportunity for your Law Firm to charge you an awful lot more money for the same outcome.

All these people need to achieve Billable Hours and, to do so, requires mucho reviewing and revising of the same documents or pleadings[4], duplication of effort, duplicate attendances—or what I affectionately refer to as the “Hand Holders” or “Atta Boys/Girls” groups.

Lawyers got the job done for many years without an Entourage. No more. A Team of Law Firm Personnel goes to an event. When the Attorney in Charge needs a drink of water or a new pen, someone on the Team acts as personal courtesan and retrieves same, much to the chagrin of the Other Members of the Entourage who did not first seize the opportunity to provide first class service to The Boss. Where would he/she be without the hand holders and back slappers?

A Team of Lawyers and Others enters the courtroom. One stands up and speaks or argues. When finished, the Entourage then gives the speaker an “Atta Boy” or “Atta Girl” compliment. Just one time before I go to my ultimate reward[5] I would like a Judge to question the need for so many personnel at the table and, if not satisfied, kick the excess personnel out of the courtroom…it would sure save the poor client a ton of money.

There are usually only two reasons for all those other people to attend the event: training or billable hours, neither of which benefits the client.

Clients don’t get better representation or better results because a law firm employs an army of support staff, each of whom is billed to the client. Charging a client for librarians, tech support to the firm, document support staff, paraprofessionals and the like does not change or improve the quality of the representation…so why pay for those people?

The bottom line: clients hire lawyers to practice law for them; those other people do not-and cannot-practice law and are therefore superfluous to the client.

A firm’s “billing culture” often plays a significant role in the reasonableness or lack of same regarding a firm’s fees and expenses. Billable hour incentives frequently are factored into attorney and other employee salaries, bonuses and promotions. Associates can be particularly influenced by billable hour objectives to establish security and status in the firm, and for partnership consideration.

An egregious example of law firms’ billing culture was a memo that circulated among associates in a major law firm, derived from an internal survey of the firm’s associates. Associates decried the firm’s billable hour requirements, stating that the firm’s annual billable hour requirement of 2,420 hours was not achievable [6].

The memo noted that associates found the stress on billable hours dehumanizing and verging on an abdication of professional responsibilities because the requirement ignored pro bono work and encouraged “padding” of hours, inefficient work, repetition of tasks, and other problems, and further promoted misallocation of work to senior associates who “need” the hours when less expensive junior associates could do the work, and complained that partners care only about associates’ billable hours.”

One criticized the firm policy that any associate, who bills more than 250 hours in a month, would be entitled to a dinner at a restaurant of their choice with one guest.

“How can I bill so many hours?” “Padding” and repetitive, unnecessary work get one to the goal.

We always examine the numbers of hours worked each day, by each timekeeper, and scrutinize all days in which any timekeeper billed in excess of 12 hours. This figure is used in light of the so-called “67% Rule.” A study of accountants, attorneys, independent adjusters and others who bill by the hour concluded that an average hourly biller could work and bill for approximately 67% of each hour spent on the job. In other words, to bill 8.00 hours in a day requires someone to be on the job for 12.00 hours; to generate 12.00 billable hours requires someone to be on the job for 18.00 hours; to generate 16.00 billable hours requires someone to be on the job for 24.00 hours. (The remaining time in any day is expended on breaks, meals, restroom stops, personal business, etc.). Thus, when one sees so many days with billable hours exceeding 12.00, the time must be closely scrutinized.

The frequency of these charges on a daily basis raises questions[7]. Is every minute in the office inappropriately charged to the client, regardless of whether personnel are using parts of the day for non-chargeable business? Is time being recorded contemporaneously with the work performed so that time is being accurately recorded? And, most disturbing, is time being inflated?

The large number of 12+ hour days also raises concerns of accountability, contemporaneous timekeeping and “portal to portal” billing practices.

“Courts have refused to believe that an attorney could perform legitimately billable tasks for periods of time that would seem to require nearly preternatural powers of concentration and stamina. Questioning the accuracy of an entry for 18.9 hours in one day, Judge Charles Hardy of the United States District Court for the District of Arizona observed that the attorney “would have had have been in his office from 5:06 in the morning until midnight, without taking any time for meals, to relieve himself or to do anything else.” Ross, The Ethics of Hourly Billing by Attorneys, 44 Rutgers Law Review, Vol.1, Page 13 (Fall 1991), citing Metro Data Systems, Inc. v. Durango Systems, Inc., 597 F. Supp. 244, 246 (D. Ariz. 1984).

In this downturned economy- where lawyers and other firm employees are losing their jobs-you can bet the employees understand this: bill more hours or lose your jobs. Worse, it has been reported that some firms have told their employees that bonuses will be paid based upon increased billable hours.

Clients must control the number and mix of law firm personnel who work your matters. Law firms cannot be left to their own devices in deciding how to staff matters; those devices inure strictly to the benefit of the law firm’s revenue machine, and do not benefit the client.

[1] With apologies to The Temptations.[2] There were also “Law Clerks,” who were lawyers-in-training, kept in the dark, fed manure and definitely never billed to a client. Some lawyers thought it would be legal malpractice per se to even think about relying on anything found by a mere law clerk. As for myself, when I was a Law Clerk I primarily aspired to make the world’s worst coffee so that coffee-making would never become my permanent job at the firm.[3] As opposed to “non-Special” Project Assistants? After all, who wants to be told they are “Not Special?”

[4] Query: how many lawyers does it take to get it right? Answer: As many people as I have on my Team or Practice Group payroll.

[5] Retirement, of course.

[6] Professor William Ross opines that “the credibility of billings in excess of 2,000 hours {in a year} is particularly suspect if one assumes that an attorney normally must spend three hours in the office for every two billable hours,” Ross, The Ethics of Hourly Billing by Attorneys, 44 Rutgers Law Review, Vol.1, Page 14 (Fall 1991), citing McMenamin, Lawyers at Bay, 31 Law Office Economics and Management 370, 373 (1991). Based upon my experiences, I agree with Professor Ross.

[7] A client should be concerned that the quality of work would suffer from anyone allegedly working such long days