11. The quandary of travel time
Travel time raises another question, besides the ones about double-billing: When should the clock start and stop?
Running the meter while traveling
Picture the following scenario: A lawyer flies from Los Angeles to San Francisco for a deposition beginning early in the following morning. (Anyone familiar with air traffic delays at San Francisco will agree that it would make sense to fly there the night before.) At 6:00 PM, the lawyer leaves the office and takes a cab to LAX. After the flight and a cab at the other end, the lawyer checks into a hotel at 9:30 PM.
At 10:00 PM, the lawyer has a late dinner in a nearby sushi bar, while reading a magazine. The lawyer then calls home, looks at the news on the television, and, after that, gets a good night’s sleep.
Assume that this lawyer bills by the hour. The question is how much can be billed on that trip and on that day?
At a minimum, if the client is paying by the hour, the lawyer should be entitled to charge for the period from 6:00 PM to 9:30 PM — the journey time from the office to the hotel room. (The travel time should — in my opinion — be billed at a lower rate, as traveling is an unskilled task, but that’s a different issue. Here we’re talking about the amount of time that can be billed, not the rate at which travel time should be charged.)
But what about the rest of the time? Isn’t it somewhat arbitrary for the lawyer to be racking up charges in one-tenth increments of an hour while shuffling along the hotel hallway, but then to abruptly switch off the meter simply on account of entering a hotel room? One does not have to be in motion in order to be traveling.
On the other hand, the meter surely has to be turned off at some point? The lawyer presumably doesn’t expect to bill while sleeping. But exactly when does the meter go off?
This is a problem with hourly billing. Although it postures as an objectively scalable form of billing, with maximum transparency, it is actually rife with arbitrary judgment calls such as this.
And what about the sushi dinner? Probably, the lawyer will bill the cost of the meal, which is reasonable. But what about the time for the meal? Personally, I would not bill that time if I were laboring under an hourly billing regime. But others might.
Their reasoning would be that this is, in essence, part of traveling. And, in a way, they’re right. If you charge for the time while you’re eating a meal on a plane (assuming you are on one of the diminishing number of flights that serve them), why not then charge for your time when you eat a meal on the ground?
Presumably, though, you would have had dinner anyway? “Yes, but not dinner away from my loved ones or my other work,” would be the reply. “This needs to be compensated.”
One would imagine that even this lawyer would not charge for the time watching TV or calling home. But who knows?
Bathroom breaks while traveling? I won’t go there.
Per-diem rates
Some lawyers who generally bill by the hour deal with travel time by applying a per-diem rate. In other words, if a client takes the lawyer away for a full day, it is still billed on a time-basis — but the unit of time is the day and not the hour.
This can make sense, but there is still the issue about what multiple of the hourly rate should constitute the day rate. A multiple of 12, maybe? Or how about 16 hours — i.e., 24 minus a notional eight for rest and recreation? But some trips might involve more than 16 hours of work in a day — a marathon mediation, for example. Essentially, this would mean the lawyer writing off the excess time. If the fee agreement provides for hourly billing, why should the lawyer do that on a trip, when there would be no such cap if the marathon took place without travel?
On the other hand, some trips involve long breaks between active lawyering. During those breaks, the lawyer might be catching up on other matters — which brings one back to the double-billing issue. So the problem is still that it’s all pretty arbitrary.
That said, per-diem rates are, conceptually, headed somewhat in the direction of flat-rate billing — which, in my mind, is a good thing. However, a per-diem rate wouldn’t work in the example given above about the San Francisco-bound lawyer whose travel on that day began at 6:00 PM. I suppose one could have a half-day rate as well. But even that could be excessive for a trip beginning in the evening.
A general absence of guidance and accountability
As I have acknowledged elsewhere in this book, all this agonizing about when to turn the meter on and off might sound petty and, to some, unprofessional. It is not the mighty cause that drove one to law school and to join this noble profession.
But the reality is that all the billing decisions analyzed above are going to have to be made under an hourly billing regime — whether one likes them or not. Typically, they will be made by the lawyer in private, with no consultation.
Very often, indeed, they will be made with no guidance from the employing law firm (beyond the mantra that the lawyer should “record all time”). I’ve never heard of a law-firm manual that tells an associate when to stop and start the meter while traveling. (That said, I suspect that some firms might have these — and I’d be curious to see one should such a thing exist.)
So to argue that this is all too petty even to think about is, in essence, to say that the lawyer who needs to rack up hours should essentially be left alone to make judgments in private, without guidance and without the indignity of being held accountable.
That’s all very well. But that type of blind trust in the system of hourly billing is one reason why the provision of legal services has become awfully expensive in recent decades. Those minutes and hours add up.
Entire contents © 2008 John Derrick