California Judge Slashes Legal Fees For Excessive and Inefficient Billing

Posted on August 27th, 2014 by Legal Fee Advisors

A California Superior Court Judge recently slashed the $1.15 million requested by attorneys after the settlement of a Marin County Welfare case by more than $700,000.[1]  The attorneys said the time they spent during a three-year legal battle fighting to reform a welfare program was worth at least $2.4 million, but they ended up with an award of only $424,574 by the court, which heavily criticized them for overbilling.

Although the suit ended with a settlement that provided the public with a significant benefit, Superior Court Judge Paul Haakenson found “that a vast majority of the hours billed were excessive, duplicative and not reasonably spent,” finding that after examining over 2,000 billing entries “[t]he billing records as a whole evidence substantial duplication and overbilling.”[2]  The Judge noted that “where counsel are earning fees as high as $710 an hour, the duplication of efforts, multiple conferences and meetings, and concurrent time spent by numerous attorneys on issues that do not require special expertise, warrant a substantial reduction from the fees sought.”[3] Examples of this extreme duplication of effort include instances where multiple attorneys would quadruple bill conferences or three to four attorneys would consult with each other, all billing for this time.[4]

Additionally, Judge Haakenson found problematic the fact that that the vast majority of time was billed by higher rate attorneys, when much of the work could have been performed by less costly attorneys, noting that “the majority of the thousands of hours billed were billed for work on issues lacking that complexity.”[5]  One attorney billed $630 an hour for tasks such as arranging travel, while another included billing time spent waiting in line with welfare applicants. These particular billing patterns, believe it or not, are seen quite often – clerical or administrative work that in most, if not all, instances is never allowed as per billing guidelines but seems to exist anyway.

Law firms ought to know that partners with high billing rates should not be billing for tasks that require little to no legal judgment, such as time spent making travel arrangements.  Instead, law firm staff that bill at much lower rates are best suited to perform these kinds of tasks. Using law firm partners with high billing rates when the use of junior staff would suffice does nothing more than inflate the legal costs billed to clients, which is clearly overbilling in the true sense of the word.

Due to these factors, Judge Haakenson reasoned that in most cases the lawyers were only entitled to 15 to 20 percent of the hours they claimed.  For example, he cut the 1,711 hours billed by one attorney to just 257 hours.[6]

This case highlights an important issue with regards to legal fees. It demonstrates that gaining a significant benefit for the client does not change the fact that it is improper to bill for excessive, duplicative, unproductive and inefficient work, and that attorney’s fees must be reasonable.

J. Clark

Legal Fee Advisors © 2014

[1] http://www.marinij.com/marinnews/ci_25346279/judge-rips-overbilling-slashes-legal-tab-marinwelfare

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