A Tale Of (Alleged) Lawyer Over-Billing

A recent lawsuit between a law firm and its client has revealed an insight into alleged over-billing by the firm.  The firm, DLA Piper, sued energy industry executive Adam Victor for $675,000 in unpaid legal fees.  Mr. Victor counter-claimed, accusing the firm of fraudulent over-billing.

During the course of discovery, the firm was required to produce a number of emails between its lawyers.  When discussing some of the emails, a story on the suit noted:

“I hear we are already 200k over our estimate — that’s Team DLA Piper!” wrote Erich P. Eisenegger, a lawyer at the firm.

Another DLA Piper lawyer, Christopher Thomson, replied, noting that a third colleague, Vincent J. Roldan, had been enlisted to work on the matter.

“Now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode,” Mr. Thomson wrote. “That bill shall know no limits.”

This article comes out just a few days after I was reading an email from another lawyer about what clients want.  Clients don’t want the highest quality legal services they can get.  That would require reading and re-reading every document, deposing every witness, etc.  Instead, what clients want is value.  Clients want to know that they’re receiving appropriate legal services given the nature of the case.

I’ve long seen this in my practice.   I’m often amazed at the sheer volume of work that some attorneys create on a case.  Maybe I’m hyper-sensitive because most of our work is contingent fee work —- we don’t get paid based on the hours spent on the case, instead we get paid as a percentage of our clients’ recovery.   Because we don’t get paid based on hours, the contingent fee encourages us to be efficient — to do the work necessary to get the case ready for trial, but not to create unnecessary work.  In other words, we’re paid for creating value.

That even makes a difference in our hourly cases.  Because of our experience working on contingent fees and doing the real work to create value, we use the same tactics and skills to the benefit of our hourly cases.  For example, I handled a real estate development dispute where the client had a previous law firm.  The large law firm had charged the client almost $30,000.00 for pre-suit investigation and pre-suit mediation.  When that failed, the client went looking elsewhere and was referred to us.  We filed the lawsuit, had a mediation, and resolved the case.  Our total fees for all of that?  Around $3,500.00.

It’s sad to hear stories about this, but at least it is a good reminder for all of us to keep thinking about our clients first and to remember that they want value.  Are we helping them?  That’s the question we should always ask.

Posted on: March 27, 2013 |

Perlmutter & Schuelke, LLP maintains offices in Austin, Texas. However, our attorneys and lawyers represent clients throughout the state of Texas, including Dallas, Houston, San Antonio, Forth Worth, El Paso, New Braunfels, San Marcos, Kyle, Buda, Round Rock, Georgetown, Lockhart, Bastrop, Elgin, Manor, Brenham, Cedar Park, Burnet, Marble Falls, Temple and Killeen. By Brooks Schuelke

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