Law Practice Management

Red-flag billing practices chronicled; report finds 'upbilling' by 21 percent of law firms

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Twenty-one percent of lawyers “upbilled” for their time in 2015, rounding up their hours worked to the next hour or half hour, according to an analysis of legal invoices from about 100 companies.

Upbilling could raise the annual legal bill by about $29,000 for a partner billing 2,000 hours a year, according to the 2016 Real Rate Report. The Am Law Daily (sub. req.) has a story.

The report chronicles upbilling and other red-flag billing practices, along with law-firm rates. It was released on Monday by CEB Inc. and Wolters Kluwer NV’s ELM Solutions, companies that help legal departments manage their budgets. Report summaries are here (PDF) and here.

The report also cautioned against two other billing practices prevalent in the legal bills analyzed. The report found that 40 percent of lawyers had submitted block bills for multiple types of work, making it difficult for legal departments to budget for legal work. The analysis also found that 51 percent of timekeepers had billed for six-minute time periods, showing they were billing for tasks such as an email or a quick phone call.

The report found that some legal departments are using technology to ferret out upbilling and other unwanted billing practices, but many in-house legal departments still don’t have the capability or don’t make the effort.

The report also found that law firm billing rates increased 5.4 percent from 2014 to 2015, even as the total hours billed by each law firm dropped 8 percent from 2013 to 2015. Rate increases for first-year associates—many of whom had their salaries increased to $180,000 this year— increased by only 0.8 percent, however.

The 5.4 percent increase in hourly rates was the highest for one year since 2008.

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