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cian or a plumber. I don’t bill by the hour.’”
Slayton, who stopped practising law 10 years
ago, says that many veteran lawyers dislike
hourly rates because “they still think of practis-
ing law as a profession as opposed to a business.
“In larger firms that see the practice of law as
a business, junior lawyers feel the pressure
acutely to bring in revenue. And the only way to
do that is by billing time.”
But Luftspring says the model of billable
hours was introduced largely at the behest of
clients who wanted to “measure something” in
understanding a lawyer’s fee.
“In some ways, it’s got some intellectual basis
to it —it’s seemingly objective. The problem is,
as we all know, measuring efficiency. I might be
able to do something in an hour that’s going to
take somebody else six hours. Or, because of my
reputation, I can make one phone call, where
another lawyer might have to litigate an issue
for a month.”
Luftspring acknowledges
there may be lawyers “of less
integrity and under some
pressure” who might bill for
more hours than they
actually spend on a file. But
he never saw that when he
was managing partner at
Goodman and Carr LLP
between 1994 and 2004.
“The big issue is lawyers who underesti-
mate the time they spend, not lawyers who
pad their bills.”
He believes the notion of rampant bill pad-
ding is an “urban legend” originating in the
United States, where associates might be
expected to turn out as many as 2,400—or
more — billable hours in a year.
“In order to meet those very high targets,
they may be adding hours to files that can bear
it,” says Luftspring. “Do I know of any evidence
of that? No. But any senior lawyer who sees
hours on a file, which are unusual or out of pro-
portion to the work done, is going to question
it. “Either an associate is grossly inefficient or
something funny is going on.”
But the current recessionary climate in
the U.S. has made bill padding a very import-
ant issue, based on material Lisa Borsook,
managing partner of WeirFoulds LLP in
Toronto, has read.
“The client suspicion seems to be that if
lawyers are scrambling for work, they may be
padding their bills.”
If they are, it’s contrary to the rules of pro-
fessional conduct—and she points out there
are “a bunch of ways to slay that dragon,” at
least in Canada.
Government agencies do so by sending out
requests for proposals (RFPs) that require bids
to commit to a fixed fee to do the work required.
Clients also have recourse if they suspect a
bill is bloated. In Ontario, they can ask a court
to determine whether or not money owed is
fair remuneration for the lawyer or law firm in
question.
“Every law firm ought to be reviewing bills
they send to their clients,” says Borsook. “They
have to ensure the level of sophistication of the
lawyer doing the work is appropriate and
they’re not paying two lawyers instead of one.
“I make sure that a client doesn’t get
double-billed while I train someone to be a
better lawyer.”
But Borsook, who also leads the leasing
practice group at WeirFoulds, says the 85-law-
Slayton
yer firm tries to ensure it never gets to that
acrimonious stage.
“I don’t want to send a suspicious bill to a
client under any circumstances—and we
explain that to all of our associates and partners.
And for those who contest or complain about
the size of their bill, we have a conversation.”
She says that dialogue has to include the
possibility of unforeseen circumstances.
For instance in a litigation, a lawyer might
give a client a fixed fee to defend against a claim
based on a set period of time. But if opposing
counsel “motions you to death” or “showers you
with paper,” the client’s lawyer might incur
unanticipated time on the file, and need to raise
the amount owed.
“I do commercial leasing and have often told
clients there’s no good reason in the world why
I can’t finish a lease in five hours,” explains Bor-
sook. “And then the lawyer on the other side
makes that prediction impossible to come true.”
She says the conversation with clients also
has to consider their “economic health.”
“If they’re going through tough times, we’re
not here to exacerbate their problems. We try to
work with clients to make sure they sur-
vive—whatever economic difficulties they’re
having—and continue to have a good relation-
ship with them.”
In Luftspring’s view, what’s driving the
debate over billing is not the number of hours
but the value clients perceive they are or are not
receiving for those hours.
“Lawyers should be asking their clients, ‘If
you want me to do this and cover all risks, it’s
going to take this amount of time and this much
money. If you’re prepared to take some risk, I
won’t do the following things and it’s going to
cost a lot less.’ The last 20 per cent of a file usu-
ally takes 80 per cent of the time —the closing
of all the doors to risk are often the hardest
things to do and are the most time consuming.
“Where we have failed as a profession is to
engage in that dialogue with clients about risk
at the beginning.”
But Slayton argues that the failure is in the
time-based billing system, which promotes
padding.
“It places bad incentives to not do things in a
speedy and efficient way, and encourages exag-
geration. It makes lawyers work much longer
than they might other wise need to work — labor-
iously and pointlessly moving stacks of paper,
one page at a time, from one side of their desks
to the other.”
“Canny” corporate counsel, who wield con-
siderable power over law firms in light of the
large accounts they have with major corpora-
tions, tend to be vigilant over the legal bills they
receive, says Slayton, whose next book — Mighty
Judgment, about the Supreme Court of Can-
ada—will be published by Penguin Group
(Canada) in March 2011.
“Big Bay Street or Wall Street firms deal with
transactions so huge that hundreds of millions
or billions of dollars are at stake, and the legal
bill could be one or two million dollars. For
corporate clients, that could be a drop in the
bucket and gets swallowed—and nobody pays
attention to it.”
He says that law societies could end time-
based billing as a “non-ethical” practice or cli-
ents could just refuse to pay bills they believe
are padded.
Getting the legal profession to voluntarily
stop basing bills on time is “unlikely,” adds
Slayton.
“It would also be a good thing to mitigate the
ethos that practising law is a business and not a
profession — but that’s not likely.”
