Lawyers know courts – and some clients – frown on the practice of lumping together lots of little tasks under a single billing entry for one or more hours. But the practice persists.
“People block bill all the time,” said Fairfax lawyer John A.C. Keith. Keith and other lawyers who have served as experts on attorney fee requests spoke with Virginia Lawyers Weekly about block billing.
The phrase shows up more often in federal courts, where there are more statutes and practice rules that allow fee-shifting by a prevailing party. But cases in either state or federal court can erupt into discovery disputes that offer a chance to ask the other side to pick up part of your client’s tab.
How does a lawyer know when grouping multiple tasks tips into dangerous “block billing” territory? Lawyers agree there’s no bright line, but two recent cases flagged specific examples.
An Alexandria federal court pointed to a billing entry that included several tasks in one four-hour block of time. The tasks: Reviewed opposition to motion to quash; drafted notice of deposition; confirmed notice of deposition with another lawyer and directed legal assistant to attend it; and sent same by email to opposing counsel. Awarding fees to a dog trainer who won a libel claim in Ebersole v. Kline-Perry (VLW 013-3-541), U.S. District Judge James C. Cacheris reduced the initial lodestar amount by 15 percent because of the “consistent block billing.” A retrial has since been ordered in that case.
A Norfolk federal court took issue with a fee request for $349,317 in a voter records case won by Norfolk State University students. In awarding $184,223.25 to the winning lawyers in Project Vote v. Long, Chief U.S. District Judge Rebecca Beach Smith said she “did not find a single instance in which a timekeeper recorded multiple entries for a single day; instead, only the total amount of time for each day is reported, with no breakdown of how that time was spent among often as many as four or five distinct tasks.”
If block billing is risky, why do lawyers want to group tasks?
Often, a lawyer gets busy with his practice, particularly in smaller firms, and will block bill, said Richmond lawyer Dennis J. Whelan.
But Whelan said he also sees block billing by larger firms, when their fee agreements with corporate clients allow block billing.
Sometimes the sheer volume of the work makes block billing a more practical solution for lawyers doing the billing and clients who are reviewing the bills.
Lawyers lose time when they separately bill each task down to the minute.
“When I am forced for one reason or another to describe each task, I bill less time,” Keith said.
A short phone call or other worthwhile task is simply ignored as unworthy of serial logging. Or the lawyer loses time to the mechanical task of recording activity.
“If you rigorously write down every entry differently,” you will lose time that could be spent on the substantive legal matter, according to Keith.
“Spending 45 minutes on a bill is not a good use of my time,” said Alexandria lawyer Philip J. Harvey.
And a detailed bill may give a client the impression the lawyer charges for every “i” dotted and “t” crossed.
Sometimes, “you can’t win for losing,” said Alexandria lawyer David S. Mercer. The more specific you are, the more questions the client may have.
Perceptions vary on block billing
Sensitivity to block billing is “really case specific and judge specific,” Whelan said.
Both state and federal courts apply multi-part tests to review attorney fee requests, with federal courts looking to a well-developed body of case law and state courts applying factors identified in Rule of Professional Conduct 1.5.
Both kinds of courts look at the bottom line: Is the fee fair and reasonable?
“It’s harder to assess the reasonableness of the fee without some degree of detail,” Keith said.
If a court has “a general impression of reasonableness, a lot of questionable entries” grouped together may pass muster, according to Keith. But block billing may be the thing that triggers closer scrutiny, prompting a judge to “back up. They will want to see the raw material,” he said.
The review for “reasonableness” may come down to an “I know it when I see it” standard.
Judges in Virginia state courts appear to be more ready to see reasonableness, lawyers said.
In the leading state court case on block billing, Fairfax Circuit Judge Jonathan Thacher saw tension between this “common, accepted and often efficient billing practice used by many Virginia law practices” and the burden of a party seeking attorney’s fees to show the requested fee is “reasonable.”
When tasks are “reasonably listed in block listings, in a manner that provides a rational summary of the time spent on various projects, the Court will accept the block billing summary as reasonable,” Thacher said in Northern Va. Real Estate v. Martins (VLW 010-8-121).
Thacher faulted the billing lawyers for citing a range of time spent on jury instructions – between 30 and 130 hours – which he said made it impossible to determine just how much time the lawyers spent on this “complex and important part of trial preparation.”
Many of the block entries included “other substantive tasks, such as “preparing legal memoranda, researching substantial legal issues, corresponding with [other parties] and preparing a trial strategy,” Thacher said.
He awarded $19,638 for block entries that included jury instructions in a total award of $272,096 in fees and costs, a sum the Supreme Court of Virginia upheld last year.
Block billing also stood the test in a second Fairfax case decided earlier this year.
A business divorce for a government IT contractor led to a courtroom fight over custody of a government contract and legal fees. The lawyer for the payor plaintiff said the defendant’s legal bill for $462,915.05 showed that 80 to 90 percent of the work was block billed.
But Fairfax Circuit Judge Charles J. Maxfield said the bill was “sufficiently detailed to allow the Court to determine its reasonableness,” and he awarded $238,323.82 in attorney’s fees to the defendant in Tureson v. Open System Sciences of Va. Inc. (VLW 013-8-069). Maxfield acknowledged that courts sometimes reduce fee awards for block billing, but said the defendants in this case already had discounted their bill by 10 percent.
Block billing may signal bill padding
Denouncing a particular legal bill for “block billing” can look like a label for something that just doesn’t smell right. And lawyers say that’s often the way a judge’s assessment works in practice.
“But there’s sort of a spectrum on” when the term block billing is triggered, according to John W. Toothman, a Falls Church lawyer who consults on legal fee management at “The Devil’s Advocate®.”
Block billing is an objective fact that can be observed by a court, but it is subjective when a particular judge sees block billing as hindering a determination of “reasonableness.”
There’s also an undercurrent to any excuse of mere carelessness in timekeeping: Block billing is a tool firms use to obscure padding and excessive fees.
“Where people are trying to push the envelope is where courts are getting into the issue,” Toothman said. “When you have block entries, you’re essentially sticking your chin out there, saying see if you can hit me,” he said.
The judge who tries the case usually is the one who awards the fees, and that judge has a pretty good sense of how the billing lawyer spends his time, according to Whelan.
A court reviewing a fee application will keep in mind other ways the case was lawyered – or overlawyered – and look at how many lawyers were at a hearing or how many were at a deposition.
It may not be the block billing per se that draws judges’ attention, but an apparent pattern of overcharging.
Fee reductions are rarely pegged exclusively to block billing, Harvey said.
Track time now, collect fees later
There are different ways of keeping track of hourly fees, and the differences are not so great in terms of different jurisdiction, but in types of representation, according to Toothman.
For instance, in bankruptcy practice, court rules demand task-based billing. Large corporate clients, including insurance carriers and employment defense, often insist on task-based billing.
Some firms maintain parallel data tracks, with one level of detail provided as required by a client, but a deeper level of detail in reserve in case there’s an opportunity to demand fees from the other side.
“For internal management, a firm wants to see that data themselves,” Toothman said. If a lawyer is spending 15 hours a day on one client’s matter, the firm wants to see that data before “the client’s eyes roll back in his head,” he said.
When Toothman is reviewing a bill for a third party, the word “standard” “makes our eyes light up a little bit,” Toothman said. For instance, if a lawyer said a tenth of an hour is her “standard” billing time for a telephone call, a client may know a particular call was shorter.
Other vague words that may trigger scrutiny include “review, analyze, conference,” or other intra-firm communication.
“These don’t necessarily translate into clear productive tasks,” Toothman said.
When it comes to billing, “the more who, what, where, when and why, the better,” Toothman said.
Pay attention early in the case to the potential for fee-shifting, so you can make sure your bills are in order and support a fee request, Whelan said.
Plaintiff’s lawyers, who generally work on a contingency basis, “are not billing in their everyday practice like large firms or a defense practice,” he said. But a civil rights case, or statutory actions like consumer protection or business conspiracy may yield attorney’s fees, and the lawyer should start billing with specificity, Whelan said.
Lawyers can’t blame vague bills on their software, Whelan said, as automated billing systems routinely allow lawyers to include as much detail as they want. “There’s enough leeway for personalization of a system to allow a practitioner to place more specificity” in invoices, Whelan said.
If a lawyer’s specialized expertise commands a higher hourly rate, billing detail should reflect that level of skill, for instance, by stating substantively what a specific motion is intended to accomplish, according to Whelan.
“Reasonableness” is the watchword from the start.
“Separate out tasks to a reasonable degree. If you write: draft discovery, draft brief, talk to client, these are three separate units,” Harvey said. “It’s a question of judgment. You don’t necessarily want to write: Spent six minutes on interrogatory one and six minutes on interrogatory two,” as opposed to a block of six hours that just has everything thrown in together.
Include the detail as you go along because it’s unlikely you’ll be able to retool a time entry later.