Cox: Time records and billings are important risk management tools

It’s sad but true: The work product of an attorney that clients study most closely is the attorney’s bill. Because of this close scrutiny, coupled with your own standards of professionalism, it is important that your time records and any invoice for services sent to the client be clear, detailed and accurate. Maintaining high standards when it comes to time keeping and billing means that you are more likely to be paid, and paid on time; better able to communicate your value to clients; and, effectively documenting your efforts, energy, and file. Good time keeping and billing fosters healthy attorney-client relationships, and these relationships are less likely to end in a claim or lawsuit. If a claim or lawsuit is filed, detailed and accurate time records can assist in disproving the allegations of malpractice.

Time records and bills should be proofread and edited before being finalized or presented to the client. Misspelled names, lack of consistency, tasks billed to the wrong file, or tasks billed at the wrong timekeeper level or rate can irritate even the most patient and loyal client. Moreover, if the theme of a former client’s claim against you is that you were too busy to give the matter sufficient attention, then error-filled, sloppy time records will only underscore this theme.

When editing and proofreading time records and bills, consider whether work that an attorney did should be adjusted to the paralegal rate for tasks that could have been handled by a paralegal. Consider whether certain tasks should be shown on the bill, but entered at “no charge.” Make sure that the descriptions of the services performed can be understood by the client reviewing the bill. Will the description of the task itself justify the time spent? Each entry should identify what was done and why. When the client is finished reading the bill, she should have a clear understanding of what you and your staff did for the last billing period and why, and she should also be left with the impression that the matter was given sufficient attention and that the time spent on the matter by each timekeeper was reasonable.

An itemized invoice for services rendered gives visibility to work product of the attorney that is otherwise invisible to the client. A great example is legal research and analysis that is not reduced to a memo or report sent to the client. Because clients often don’t see their attorney’s work product on a day-to-day basis, and sometimes rarely see tangible work product at all, an itemized invoice can illustrate to the client the amount of time and energy that the attorney is investing and on what subjects. A monthly invoice can also serve to update the client on the status of her matter when no substantive update or report has been sent within the last 30 days.

Detailed billings or time records can also help in the defense of a claim or lawsuit that is brought against the lawyer or law firm. Often, the very first item a professional’s defense attorney will review is the professional’s time records. If complete, these time records provide a tidy timeline of the representation, they document the dates and subject matter of communications on the matter, and they may illustrate the diligent attention that the attorney and his staff paid to the matter.

Time records can also be a good way to document that you performed certain work that is part of due diligence. For example, telephone calls to the client explaining a certain issue in the case (“Discussion with client explaining ramifications of not naming ABC Corp. as a defendant in the complaint”). Then, when the client claims “you never told me what might happen if we didn’t name ABC as a defendant,” you have not only your memory to challenge that assertion, but you have a time record as well, which the client presumably reviewed when he paid the bill. But be forewarned: If you are a meticulous time keeper, the absence of a time record on a particular task can be significant as well. As the saying goes with medical records, if it isn’t documented, it didn’t happen.

It is also worth mentioning that lawsuits for unpaid fees should be carefully considered. A lawsuit for unpaid fees should not be filed unless it is absolutely necessary or warranted. Aggressive collection efforts and suits for fees are often met with malpractice claims against attorneys or disciplinary grievances.

Accurate and clear billings by lawyers can serve as a powerful risk management tool. Satisfied, well-informed clients rarely sue or bring claims, even in the face of a legal error. A lawyer is more empowered to resolve disputes or errors with a satisfied, well-informed client. A detailed, timely, and accurate itemized invoice for services rendered can keep your clients satisfied and well-informed. Detailed time records can also help defend against complaints lodged against you.•

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Dina M. Cox is an attorney with Lewis Wagner LLP in Indianapolis. She focuses her practice on professional liability defense, drug and medical device/products liability defense, consumer class-action defense, insurance coverage, and insurance bad-faith defense litigation. The opinions expressed are those of the author.