Billing all time spent, and the dreaded 0.1

Although it is a system disliked by most lawyers, and one that seldom pleases clients, the practice of the lawyer billing all time spent, and recording time in 6 minute (0.1 hour) increments, is extremely common.

 

It is sometimes not appreciated by clients that for many lawyers (especially litigation lawyers handling a large number of files) a significant proportion of legal work involves an endless stream of brief “paper pushing” tasks: brief e-mail exchanges, reviewing information requests, receiving reviewing and forwarding correspondence, sending reminders, confirming dates, making notes of tasks performed, etc. A five minute conversation or eight minute e-mail on each of the fifty files on a lawyer’s desk can quickly consume a day. Indeed, most lawyers spend as much time each day on short duration routine tasks as they do on “legal strategizing”. As a result, much of a lawyer’s timesheet may be made up of a string of “0.1” and “0.2” tasks which if not billed would put the lawyer out of business. No doubt clients might feel they are being “nickel and dimed” when faced with a bill containing a seemingly endless string of 0.1s and 0.2s, but that is simply the reality of much legal work. To avoid the negative perception that a bill containing many 0.1s and 0.2s may create, some lawyers resort to providing generic descriptions and dollar amounts for large amounts of work e.g. “Fee for reviewing documents and advancing claim, $5,000”. Setting out the full list of tasks performed and the corresponding time for each may give the impression of the lawyer “nickel and diming” the client, but is generally considered more transparent, and therefore preferable. Detailed particularization of time spent is almost universally required by large sophisticated legal clients (e.g. banks, insurance companies, etc).

 

Clients paying by the hour should expect to pay for all time spent, including time wasted due to events beyond the lawyers control. For example, it may be appropriate for a lawyer being paid an hourly fee to include a time entry such as the following on an invoice to a client who agreed to pay by the hour:

 

Attend court for hearing of urgent application to have claim of builders lien removed from title to land. Due to an error by the registry, the matter was not on the list of matters to be heard by the court that day. Attend the registry to have matter assigned to a courtroom. Attend courtroom and wait for matter to be heard; judge refused to hear the matter on the grounds that it would take too long and was not as urgent as other matters on the list. Attend office of the judicial case manager along with opposing parties to identify suitable date for future hearing; 2.6 hours.

 

Lineups at court registry counters do not move fast, waiting in court for a matter to be called can take painfully long, and clients who pay by the hour accept the costs associated with inefficiencies in the legal system. Lawyers will generally apply a “but for” test when recording time to be paid on an hourly basis i.e. they will ask: “But for being retained on an hourly basis to run this file would I have had to spend this time?” If the answer is “no”, the time is likely billable.

 

Clients should be cautious not to underestimate how long document review and information organizational work can take. Clients who have complicated personal financial affairs (e.g. many bank and investment accounts, RRSPs, make donations, etc.) but nevertheless file their own tax returns are probably “re-surprised” every year at how long it takes to organize all that financial information and draw out the data necessary to complete the tax return. That is precisely the type of work that lawyers spend time doing and the more disorganized the documentation to begin with, and the more nuanced the information required to be extracted, the longer it takes. Some organizational work can be delegated to legal assistants but in complicated cases lawyer input is required to decide how best to organize the information and to review the documents to draw out the key information required.

 

In summary, clients who agree to pay by the hour should expect the lawyer to bill all time spent on the file, including short phone calls and emails, and should not underestimate the time required to collect and organize information, especially for large cases.

 

 

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