Time inflation that is. I’m certainly not an economist.
In the past, I have written about issues associated with overbilling by lawyers in a number of different respects.
Today’s post involves a rare public situation involving the admission of overbilling by a lawyer – one that comes out of Illinois and involves a lawyer who worked his way up the ladder in not just one but two prominent firms in Chicago. The attorney, Christopher Anderson, has now been made the subject of formal disciplinary proceedings based on his own admission of inflating his time entries and billings first while at Kirkland & Ellis as an associate and later at Neal Gerber Eisenberg, ultimately achieving the status of a non-equity partner.
Anderson came clean to the powers-that-be at the Neal Gerber firm after he had been practicing there for three years in 2018. That firm did its own investigation and decided it needed to offer refunds or credits to some 100 clients who had been made to overpay as a result of Anderson’s conduct. The refunds, as reported in the disciplinary complaint, amounted to roughly $150,000 and stemmed from the conclusion that only 4/5 of the time Anderson had billed to clients was legitimate. The complaint indicates that once Kirkland & Ellis learned of Anderson’s conduct and that he had been engaged in the behavior there as well worked through its own process to offer refunds to clients.
The complaint describes the nature of the scheme on Anderson’s part to inflate his billings and is what I have always believed is what happens to be the most widespread way of abusing billable hours in our profession because it is the most tempting route to travel and the one that lawyers believe is the hardest to prove is happening:
During his time at both firms, in an attempt to meet what he perceived to be the firms’ billing expectations, Respondent recorded time beyond what he had actually spent in handling client matters, knowing that the time he recorded would be billed to his client and that they would be asked to pay fees based on the records he created. For the days that Respondent felt he had not recorded sufficient time on client matter, he increased the time he claimed to have been spent on those matter based on a number of factors, including his assessment of the likelihood that the client would object to the time he recorded. As an example, if Respondent spent 0.3 hours on a client matter, he would record that he had actually spent 0.5 hours, or he would bill 2.1 hours for work that actually took him 1.7 hours to complete.
Not surprisingly, some immediate reporting about the situation from The American Lawyer stressed the rareness of intentional overbilling. I beg to differ on that. Unfortunately, I think this kind of practice goes on much more often than our profession would ever care to admit. People who act out of a feeling of pressure that their “numbers” are not strong enough or who feel like they’re being forced to accept a cut-rate hourly fee for their time can find themselves heading down this path because, unlike inventing tasks that could be proven not to have been performed, there truly is very little ability for an outsider to prove that a lawyer who says they spent 2.1 hours doing something that really only took them 1.7 hours to complete is lying to you.
Or, as more succinctly put by my friend Trisha Rich who was quoted in the Chicago media about this:
“It would be hard for somebody to catch on to (overbilling in small increments) if somebody was doing that over time, because basically our billing records are on your honor,”
Other than this particular situation in which the conduct came to light because of the lawyer’s own guilty conscience, instances usually will not be ferreted out unless the lawyer also forgets that “pigs get fat and hogs get slaughtered.”
The other interesting piece of this story is that Illinois is only charging Anderson with violations of RPC 1.5 and RPC 8.4(c), but not also charging for violating RPC 7.1. Illinois’s Rule 7.1 certainly could have also been included in the complaint because Illinois’s version of the rule has the same language as the ABA Model Rules: “A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.”
Given that Anderson essentially has admitted the misconduct, throwing an additional charge at him likely would just have been piling on, but trying to remind lawyers that RPC 7.1 doesn’t just apply to advertising but applies to a wide variety of false statements about a lawyer or their services (here, falsely stating how much time you actually worked) is something of pet peeve of mind mine. [edited to be less stupid on 1/31/19]