10 Ways That Legal Firms Disguise Overbilling

Law firms in the U.S. have gotten so expensive and so bad at overbilling, but there are ways to spot when a bill has hidden charges.

According to recent industry research, large companies with big legal departments go over budget by about 37% every single year. Why do they go over budget? A big reason is overbilling from the outside law firms they hire to do work for them.

It’s become such an issue that entire companies have been formed to help businesses analyze and help organizations manage their legal spend. That’s right. Lawyers sometimes pad their billable time—and there is now a growing industry to ensure that businesses pay a fair amount for their legal services.

Here are the top 10 ways law firms can hide overbilling:

Block Billing. Block billing is when a lawyer enters multiple tasks under one time period, without separating the time each task took. 

Intra-Office Communications.  This is when multiple attorneys within the same firm discuss the client’s matter with each other or seek advice from a colleague about a legal issue.

Higher-Rate Staff Used Inappropriately.  Sometimes lawyers will do work that is more appropriate for a lower-rate attorney or a paralegal.

Excessive Time.  This is the most common complaint of clients, yet has historically been the easiest for law firms to justify. Many clients have a “feeling” that a certain task took too long, but cannot explain why. SIB Legal Bill Review explains in detail the reasons a law firm should reconsider specific charges on an invoice.

Junior-Lawyer Training.  Many times, law firms will charge for a junior lawyer's on-the-job training. We believe that the law firm carries financial responsibility for training its lawyers; it is for the law firm’s long-term benefit.

Inadequate Description.  When a lawyer does not adequately describe his or her activity, there is no way for the client to determine if that activity added value for the client or if the charges for that activity are reasonable.

Overstaffing a Given Task.  A client should not have to pay three attorneys to accomplish a task that requires only one lawyer. Defending a deposition and arguing a discovery motion are usually one-lawyer tasks.

Duplicative Work.  Sometimes one attorney will charge for the same task in more than one billing period.

Administrative Tasks.  Sometimes law firms will charge attorney or paralegal rates for tasks that could and should be done by administrative staff. 

Discrepancies between Time Entries.  Sometimes two lawyers attend the same meeting but charge different amounts of time for doing so.