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Frequently Asked Questions About Our Attorney Fees Auditing Services

Who Are We?

Lead by a double Certified trial lawyer with over 20 years of experience in billing and commercial litigation, Legal Billing Adjusters, LLC. provides hands-on forensic auditing, consulting, and expert analysis of contested attorney fees, costs, and expenses. LBA does not use generic computer programs to audit attorney fees. Our hands-on, roll-up our sleeves auditing approach necessarily requires us to be intimately familiar with your legal billing concerns. There is simply no substitute for hard work.

At LBA, we focus on three primary areas of legal bill auditing:

  • attorneys’ time;
  • expenses and disbursements;
  • compliance with billing guidelines; and
  • expert witness invoices and expenses.

What Is Legal Bill Auditing?

Auditing of attorney fees is a consumer’s management and risk assessment tool to determine whether hourly billing errors, abuses, and inefficiencies exist. The audit of attorney fees is accomplished through a careful examination of the law firm’s billing records by examining the attorney’s time, fees and expenses. Auditing legal fees is a very cost-effective way for a consumer to save a lot of money in legal fees and expenses.

Because a majority of corporate law firms charge clients on an hourly basis, and base attorney promotion and compensation almost entirely on the number of hours billed, rather than results achieved for a client, lawyers and law firms have a lot of incentive to bill as many hours as possible and little incentive to work efficiently.

In fact, according to the California State Bar, most layers who block bill their time inflate each client’s bill by 10-30 percent, and at the average national billing rate of $661.00 per hour (as of April 2012) which means that most big-firms lawyers overcharge their clients anywhere from $150,000 to $400,000 each year.

Will An Audit Of Our Attorney Fees Affect Our Relationship?

Do you expect accountability from your employees? What about efficiency? Are all your employees held to the same level of accountability and efficiency? If so, then why shouldn’t your attorneys be held to the same level of efficiency and accountability?

In today’s day and age, globalization, smart phones, tablets and developing technology demand efficiency, so why shouldn’t your attorney work efficiently? Reviewing of attorney fees and law firm’s billing practice is a review of efficiency and cost containment measures. It is not a matter of distrust.

Efficiency benefits everyone! A review of attorney fees and billing practices will allow the law firm to implement responsible billing practices and become more efficient. An efficient law firm is a more desirable law firm. All responsible businesses keep an eye on its profits and losses. Responsible Law firms are no different and they should be expected to understand your budgetary concerns.

How Will Your Auditing Services Control Our Attorney Fees And Costs?

Unfortunately, there isn’t a blanket, cookie-cutter response to this question. Every situation is unique. However, Legal Billing Adjusters, LLC will begin with a review of your Retainer Agreement and your prior legal bills.

From there Legal Billing Adjusters will implement a unique Legal Billing Policy for your layers. A Legal Billing Policy is the foundation for an effective cost containment measure which is achieved through certain ground rules. For example, it may be necessary to establish billing formats, record keeping policies, defining recoverable costs and expenses, and setting budgets. However, the best Legal Billing Policies cannot function alone. Regular compliance oversight is necessary to ensure that your lawyers continue to follow your wishes. In addition, it is equally important to regularly monitor your lawyer’s billing practices to determine whether they have implemented ways to recover your savings through creative alternative billing practices.

What If Our Business Has More Than One Law Firm Working For Us?

No problem! In fact, this will prove to be a very effective cost containment scenario. 

“Benchmarking” allow us to evaluate the performance of each law firm and compare one to the other. We now have the unique opportunity to measure each firm’s efficiency, productivity, hourly rates, budget compliance, reimbursable expenses, use of paralegal and associate time, and results.

What Will An Audit of Our Attorney Fees Cost And How Are They Billed?

There are three ways to approach this issue. One is to charge a flat rate. Second, is to charge a percentage of the of the gross legal fees and costs that are under audit. Third, is to charge a contingency fee, whereby a percentage is paid based on the amount of savings achieved through the audit. 

Why Should I Hire Legal Billing Adjusters, LLC Rather Than Use a Computer Program?

E-billing software is effective but only to a certain point. E-billing cannot recognize reasonable and customary local hourly attorney’s fees. E-billing does not monitor efficiency, and it cannot oversee ongoing enforcement of billing guidelines. Other E-billing short falls include failing to recognize when one is being charged for low level, non- professional work and, perhaps most importantly, it cannot offer your lawyers positive feed- back to help them operate more efficiently. 

What Are Some Common Legal Billing Practices That Should Be Scrutinized?

  • Billing for time spent creating or reviewing bills.
  • Attending a court hearing, conference or deposition with a large “support” group.
  • Conferences with other attorneys in the office.
  • Charging clients for firm overhead.
  • Unauthorized legal research.
  • Pyramiding (i.e., charging for clerical work at attorney rates).
  • Changing hourly rates without prior approval.
  • Changing staffing for the convenience of the law firm without prior approval.
  • Using multiple attorneys to accomplish work of a single lawyer.
  • Recycling work product and charging as if the work was newly created.
  • Billing for time used to train new Associates.
  • Billing improbably long days.
  • Billing in large “blocks” of time, masking the amount of time required for each individual task.
  • Billing in large “minimum” time segments, such as 15 minutes for leaving a voicemail.

How Do I Choose An Auditor to Examine My Attorney Fees?

Carefully!

Ask your auditor about their background in litigation and billing.  Ask your auditor if she has personally been involved in litigation and billing practices, or is she working at the direction of someone else? Has your auditor personally attended law firm billing think tanks where senior partners shaped their young billing associates to “not let the truth get in the way of a good story.”? Make sure your auditor is familiar with commercial best practices, legal ethics, and standards.

Don’t rely upon billing software. A billing program is only as good as the programmer because incorrect or poor-quality input will always produce faulty output. There is an old saying in the software programming industry, “garbage in, garbage out.” There is not and never will be a suitable substitute for manual, hands-on, and nose- in- the book attorney fees auditing.

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