Allocatur

Padding of time records is Theft

A US disciplinary body has described the recording of personal phone calls as billable to a client as "simple thievery".  And so it is.  Charging time to a client for work which was either not undertaken, or took less time than that recorded ("padding"), results in the client paying for a service which wasn't actually undertaken.  If the fee arrangement with a client provides that the lawyer is charging in accordance with time spent, then that says it all.  Is seeking payment for time not actually spent that much different to Visyboard and Amcor entering into a price fixing arrangement?

I recently gave a seminar on "The Ethics of Time Based Billing".  This is a topic which some lawyers would rather ignore.  However, it is likely to be of increasing interest to Australian disciplinary bodies and to courts reviewing legal fees, with the continuing impacts of the Legal Profession Acts.  There are many other ethical aspects of time billing other than time padding.  I will look at these in future posts.

KPIs as a Marketing Tool for Law Firms?

The Harris Cost Lawyers/Mahlab Recruitment survey of Corporate Counsel/Law Firm Relationships found that 51% of corporations use panel firms, but only 23% of Corporate lawyers had procedures in place to formally review the performance of their lawyers, even if a panel was used.

Formal KPIs provide a non-threatening environment in which a client can express their concerns and desires. It is an interesting marketing tool for a law firm to propose their own set of KPIs, if the client does not do so. This assists the client, but also sets the ground rules and parameters within which the parties are operating. Identifying appropriate KPIs will require identifying the client's expectations - which is the base starting point for delivering value to the client.

We all should know that we are fortunate if a client expresses dissatisfaction, because at least we then have the opportunity to remedy the situation. 95% of clients keep quite if they are unhappy and simply never come back, or worse still, we both lose the business and end up in a dispute over costs.

Formal KPIs help avoid this.

Will Your Law Firm Service Company have to Repay Clients?

Thanks to Simon Lewis (http://www.sinch.com.au/seminfor) for referring me to the release from the Queensland Legal Services Commissioner regarding charges for outlays and disbursements. Any markup on these will now have to be disclosed to clients and the client's consent obtained. This ruling also applies to service companies. In that instance, the law firm will be required to disclose the interest in the service company or other entity which is charging marked up disbursements.

Not only that but firms will need to refund markups from 1 July 2004 to avoid prosecution. It will be interesting to see if the ruling is followed up in other states. Certainly, in Victoria, markups on disbursements will not be recoverable other than in accordance with specific provision in a Cost Agreement. Some years ago the Law Institute of Victoria alerted practitioners to the difficulties of charging file management and file opening charges. The full release is at http://www.lsc.qld.gov.au/policies/guidelines.pdf