For a Few Dollars More: the Perplexing Problem of Unethical Billing Practices by Lawyers

Abstract

The once forbidden subject of unethical billing practices by lawyers is now openly discussed. Reported cases in which lawyers are professionally disciplined or criminally prosecuted for billing abuses are disturbingly routine and press accounts of lawyers' alleged billing and expense fraud are similarly common. These cases have a disproportionately negative effect on the legal profession and are personally ruinous for the lawyers involved. Despite the obvious negative consequences, however, unethical billing practices persist. This article examines this phenomenon. In doing so, it analyzes the reasons for lawyers' misconduct from a practical perspective. These reasons include lawyers' ignorance of, or insensitivity to, applicable standards of conduct; the absence of stable professional bonds; lawyers' competitiveness; law firm compensations systems that directly reward lawyers' productivity based on billable hours; lawyers' perceptions of clients as adversaries; greed and envy; and mental illness, personality disorders, and substance abuse. In discussing fraudulent billing, the article further draws on the psychology and sociology of white collar crime, which is plainly appropriate because billing and expense fraud by lawyers fits neatly within the definition of white collar crime in all respects. Having analyzed the reasons for lawyers' unethical billing practices, the article discusses strategies that law firms may employ to address the problem. The article concludes with a discussion of lawyers' duty to report colleagues who engage in billing and expense fraud to professional authorities under Model Rule of Professional Conduct.