14. How common is
bill padding?
The big question — which few in the legal profession really want to address, perhaps because they are scared of what they might discover — is how much outright bill padding does take place. There is some evidence that it may be more common than one would care to think.
Evidence of bill padding
In his already referenced survey, Professor Ross of Samford University’s Cumberland School of Law asked lawyers whether they had “specific knowledge” of bill padding — i.e., invoicing a client for work never performed or exaggerating the amount of time spent on a matter.
Professor Ross reported that two-thirds of respondents said they had such specific knowledge. Respondents were not asked whether they themselves had taken part in such a practice.
Likewise, an article published in 2006 in Law Practice Management, a magazine of the American Bar Association, described what its author called “ordinary billing inflation or padding” — as opposed to the most “extreme” variety — as “probably rather common.” (Ethics and Time-Based Billing, by Michael Downey, Law Practice Management, January 2006.) The same article referred to an unspecified 1991 study in which a majority of lawyers taking part estimated that five percent of all billed time was padding and one-sixth of those surveyed said 25 percent of all billed time was padded.
It’s worth underscoring that this is not scare-mongering from the fringes of the legal profession. Nor is it mudslinging originating outside the profession. I am quoting from a recent article in a publication of the American Bar Association, no less.
The article — which originally appeared in the December 2005 edition of St. Louis Lawyer published by the Bar Association of Metropolitan St. Louis — went on to say: “Holiday distractions and year-end deadlines for bonuses and billable hours may make padding more common this time of year.”
Degrees of padding
There is, indeed, a distinction between “ordinary” bill padding and the most egregious variety. It’s not that the “ordinary” variety is okay, but the fact is that there are degrees. There is the systematic, truly shocking variety — especially carried out at a senior level in a firm — that results in the type of criminal prosecutions discussed in the last chapter.
And then there is the “ordinary” type where lawyers — under pressure to meet targets and anxious to keep their numbers on track — might, here and there, upgrade what should be, say, a 1.3-hour time entry into a 1.5-hour one. No single instance of padding may seem all that much, but, collectively, it adds up.
That said, it may often be a gray area as to how much, if any, actual “padding” takes place, because of the inherently imprecise nature of recording time in the first place (see earlier discussion about increments, arbitrary choices regarding when to turn the meter on and off, etc.).
The problem is that the profession seems, collectively, to consider its policing duty done when a few egregious padders are exposed and punished, while not really addressing the problem of lesser padding on a widespread basis. And, to be fair, padding is — as a practical matter — very difficult to police, short of having ethics monitors peering over shoulders with stopwatches.
That’s one of the great pluses of flat-rate billing. Because the fee is agreed in advance, the issue of padding never arises.
The elephant in the dining room
The extent of “ordinary” bill padding may be the legal profession’s proverbial “elephant in the dining room.” Few in the profession want to acknowledge its presence, yet many — if pressed — admit that its effect is pervasive.
Perhaps it is the discomfort that many feel about looking too far into this particular Pandora’s box that makes them express their concerns about the billable hour by focusing on the much more socially acceptable notion that, maybe, lawyers are being worked too hard because of high billable hour targets. That rather gentler expression of concern may be a surrogate for a thought that is far more disturbing — namely that the legal profession has overwhelmingly adopted a billing system in which dishonesty, in varying degrees, is not uncommon.
High billable hour targets may indeed encourage padding. However, if there is a problem, I suspect that it will never go away so long as the hourly billing business model remains dominant. Only by focusing attention away from time and onto value can the profession hope to rid itself of such a blight. And that, sadly, is unlikely to happen across the board.
Entire contents © 2008 John Derrick