The Uncertainties of Legal Billing can Diminish your Law Firm’s Bottom Line
Most attorneys are aware they have an ethical obligation to keep their fees at reasonable levels. The Model Rules of Professional Conduct established by the American Bar Association states lawyers are not allowed to collect unreasonable fees. The courts also mandate the obligation to provide legal services at reasonable rates. The Supreme Court has ruled lawyers must apply billing judgment and make a concerted effort to exclude excessive, unnecessary and redundant charges/expenses. The pressing question is what, exactly, constitutes a reasonable rate for legal services.
What is a Reasonable Legal Fee/Charge?
The vast majority of law firms have past due accounts. Upwards of 40% of these past due accounts stem from the same clients who simply refuse to pay their legal bills. However, plenty of clients simply dispute the law firm’s charges and fees. These clients insist the fees for legal services are unreasonable. Up until the past couple years, it was attorneys who determined whether legal fees were reasonable. Nowadays, it seems as though clients are making this judgment on their own.
The Divisiveness of Hourly Billing
If you were to poll most clients, the majority would prefer to pay a flat fee for legal services as opposed to being billed by the hour. Sadly, some attorneys fudge their billing hours to rake in the cash. It is awfully tempting to manipulate hourly billing to one’s advantage. If such alterations are unreasonable, trouble can arise in the form of contested and unpaid bills.
Even solvent clients capable of paying for legal services sometimes skip payment and dispute the invoice. More and more clients are taking the initiative to argue legal fees are unnecessary or excessive. Sadly, these disputes are often the result of poor communication between attorneys and clients.
Reasonable Billing is Mutually Beneficial
Attorneys who abide by the mantra of reasonable billing are that much more likely to retain client services across posterity. Perhaps even more importantly, reasonable billing inspires clients to recommend the attorney’s services to friends, family, co-workers and others in their social/professional circles. When in doubt, attorneys should avoid billing for legal work that is redundant, unnecessary and/or excessive. If there is any question as to whether the fee in question is reasonable, it is in both parties’ interest to avoid the charge altogether.  After all, it will prove more profitable to keep a happy client in the fold than anger him or her and end up sending out one invoice after another without receiving payment.
