New York Lawyer
October 2, 2003

Q:
There is a junior associate (a first year) in my practice group who I believe is padding her hours.

She arrives at the office after 9:30 am and leaves by 6:00 pm nearly every night. She takes an hour for lunch and goes to the gym every day from 4:00 to 5:30 pm. Yet her time sheets (we share a printer) reflect 9.5 hours every day.

On the other hand, I am in every day by 8:00 am and often work long into the night. I'm billing more than enough hours.

I am the next-most-senior person in our group and it really irks me to see her wandering in so late, taking so much time out of the day and then cutting out early when I've got plenty of work I could delegate to her. She claims she is too busy to take on projects from me but I think it's really just that she only wants work from very senior associates. If her office wasn't next to mine, I wouldn't have it shoved in my face every day.

This is driving me crazy.

I am not sure what I should do or who I should approach about this. Do I have an obligation to turn her in?

Submit Your Question

Find More Answers

A:

This question opens up a big can of worms about the whole issue of padding bills. I can�t possibly do it justice in a short column, but before answering your direct question, I�m going to hit on some high points about the vagaries of keeping track of and reporting billable hours.

Remember, lawyers only started billing by the hour in the 50�s and 60�s. Before that, they put a value on their work and sent out a bill, often with a single number (sometimes just once a year!) saying �For services rendered.� Billables were an attempt to be more transparent and objective. The obvious pitfall to the billable hours system is that it represents a conflict of interest between the firm and the client (higher is better for the firm, lower better for the client). You know when the handy man comes over and says he�s billing by the hour? Don�t you immediately think, �Uh oh, I could really get ripped off here�? This is how clients sometimes feel.

I won�t theorize about the extent of bill padding. There have been some surveys done, but they all rely on self reporting � who can tell whether people are being honest about their own habits? For instance, in 2002, one in four partners in England reported that padding occurs "all the time" at the top 50 firms in the United Kingdom, according to London's Legal Week.

But it�s uncontroversial to say that there is a wide range of problems associated with timekeeping.

There are the Cheaters: these people commit outright fraud, and they are probably in a minority. Webster Hubbell comes to mind. Another fellow set his computer program to automatically increase billings by 15%. Obviously this is indefensible.

There are the Angry Avengers, who increase their hours fueled by anger at the overworked-associate lot and the perception that the firm doesn�t care about them. �They treat me like garbage,� is the reasoning, �so I�m going to go ahead and pad bills in order to make my billables.� I hear about this a lot. Avengers can�t possibly comfort themselves that it�s �okay� to overbill a client just because their firms don�t treat them well. A related group are the Honest-but-Scared crowd, who beef up bills based on fear and pressure to bill. (And the pressure is intense. In 1963 the ABA said the average lawyer should bill 1300 hours. Now it�s 1800 at minimum, 2000-plus is common, and even 2500 to 3000 hours are not enough to make anyone turn a hair.) This, again, is an explanation, not an excuse.

Another group I�d dub the Leisurely Workers, who languish through assignments to rack up the hours, rather than doing their work as rapidly and efficiently as they could. Then there are the Rationalizers, who think things like, �The client is rich and won�t notice,� again knowingly overbilling. The same theme can arise from personal biases. As one lawyer put it, �In a case in which you know the client can pay the freight, and when you hate the case, you�re more likely to bill every millisecond. Including the time you spent in the shower thinking about how you�d like to call them and tell them off. In other ones, you like the case, you like the client, you say I�ll go easier on how I bill them.�

There�s a sizable number of Forgetters, who avoid timekeeping days or weeks or even months. �After two days it�s historical fiction,� gibes Paul Kiernan, a partner with Holland & Knight in their Washington, D.C. office. �After three days it�s science fiction.� Trying to reconstruct one�s work well after the fact is an invitation for abuse.

Others are Backpatters, who overvalue their work (�I worked 12 hours, I�ll bill 12 hours�). (Client benefit from some lawyers who undervalue their time, thinking that if anyone knew they spent 25 hours on a single document, they�d be branded as idiots.)

I think the most common biller is the Honest Estimator. Hours can be over- or under-counted due to an innocent approximation of time based on a busy person�s reality (�I�m going to reconstruct my day as best I can. I didn�t have time to write it all down as I went along.�). It�s hard to keep up all day, especially with the dashed phone call here, the quickly scribbled memo there, the hallway �conference� where you check in with a senior partner, and so forth. A lawyer looks back and guesses at how much time he or she spent on each matter. It�s hardly scientific but it�s understandable. I have less trouble with this approach than with the others. But it continues to point up the difficulty with billable hours � even a perfectly honest person has trouble applying it with any real accuracy.

What are some solutions? I would suggest the �client at the elbow� test. Imagine that as you write down your hours and reconstruct aloud what you�re charging, the clients involved are sitting there with you, listening to you. What would you openly and unabashedly say, in the client�s presence, and what wouldn�t you say?

Partners should involve associates in preparing the bills so they know what the process involves. Firm guidelines should address this issue head on, to decrease risk (firms don�t want to get sued for padding or overbilling). And an easy solution for the laggards is to insist that billing be completed promptly after work is done and to follow up relentlessly, with penalties, when bills are late.

More broadly, firms should try to put in place alternatives to hourly billing. Even the ABA admits that the billable hour is playing havoc with people�s lives and suggests other ways of approaching billing. See their report issued last year (at www.abanet.org/careercounsel/billable.html).

As to your situation. You are more concerned about equity, it appears, than honesty. You�re killing yourself and she�s not, but as far as anyone can tell from her time sheets, she�s working just as hard. That in itself is a worry and a clue to your firm�s moral compass or lack thereof � you seem less concerned that she�s padding and more concerned that you�re almost like a sap for actually churning out legal work while she�s doing Pilates.

If you are right, she is clearly ripping off the firm and its clients, so your concern is appropriate. But you may be wrong -- she might be doing work at home, or there may be some other good explanation. Don�t rat on her without some sense of the validity of your claim (if you bring it up with someone else and it turns out you�re wrong, you�ve put not only her reputation on the line but your own). I�d suggest a few things. To get her to do some work for you, emphasize which partner or senior associate the assignment is coming from, so that she recognizes that there�s someone higher up she may have a chance to impress.

About her time sheet: You could laughingly say to her, one day at the printer when her time sheet is sitting there, �Whoa! Nine-and-a-half hours and you still get to the gym every day! Nice work!� This could alert her that others notice her cushy schedule. Another approach would be to sit down with her and have a general discussion about billing, to explain what�s expected and what�s not; there�s a chance she doesn�t understand what�s appropriate behavior. You could be even more straightforward, saying something like, �Look, I kill myself every day to get my work done, and I often ask you to do some work for me, but you always say you�re busy. A the same time I can�t help noticing that you always have time for lunch, there�s always a gym break, and I�ll tell you honestly I�ve noticed your time sheets regularly read 9.5 hours. Now maybe you�re doing work at some other time, or whatever, but to me it looks like there�s something funny going on here. If so, it�s not fair to the rest of us, who are playing by the rules, and it�s obviously not fair to the clients. We�re supposed to be a team, all working hard. What�s up?�

If this approach doesn�t work, you can ask a mentor or other colleagues for advice on this, without naming names at first. This approach may depend on the culture of your firm, and whether the partners seem to support a culture of over-billing or insist upon scrupulous timekeeping. If they are straight arrows, and her behavior doesn�t change, I think you do have a duty to make sure that someone in the partnership knows what she�s up to.

Sincerely,
Holly English
Principal Consultant, Values at Work