Billable Hours, Politics

Billable Hours May Get Former Congresswoman Disbarred

Former Rep. Denise Majette

A former congresswoman faces possible disbarment for allegedly overbilling a client.

Now, obviously overbilling is terrible and the bar should protect clients, but the allegations, at least as reproduced in the Atlanta Journal-Constitution, sound damning only to the lay observer. As I read through the charges, it seemed like pretty run-of-the-mill litigation.

But whether the congresswoman engaged in overbilling or not, the story reminded me of the inherent shortcomings of believing the billable hour is objectively fair to clients….

Denise Majette served one term in the U.S. House of Representatives from 2002-2004, before running for Senate and getting trounced. Since her departure from the political stage, Majette has worked part-time as an attorney.

Now a Special Master has issued a 36-page report describing the allegations of overbilling as “unfortunate and disturbing.”

Since Majette’s former client filed a bar complaint in 2010, Majette has characterized the dispute as a disagreement about fees and has refused to accept responsibility for her actions, [Special Master Hal] Daniel wrote. Majette offered no substantive evidence to rebut allegations that she failed to account for fees already paid to her, submitted inaccurate and fraudulent bills to her client, and committed perjury or fraud when filing a court motion seeking fees, the report said.

Pretty standard for a fee dispute: client alleges overbilling, lawyer claims it’s a disagreement. But the specific allegations don’t seem so bad:

Lawson allowed Majette to bill $200 an hour and he was pleased with the quality of her work. From September 2009 through March 2010, Majette was paid $24,500, the report said.

An hourly rate of $200 is eminently reasonable for Majette. Before her congressional run, Majette served as a state court judge in DeKalb County for nine years. Atlanta is not New York, but you’d have a hard time hiring a paralegal for $200/hour in New York. A veteran former judge is worth much more.

Hearings on the estate litigation were held in March and April 2010, and a judge allowed the lawyers to seek legal fees for their work.

Lawson let Majette draft a motion for fees. She submitted the motion to the court before showing it to Lawson, the report said. Majette’s request for herself: $130,000 for 260 hours of work at $500 an hour.

That’s not so terrible. She did seem to switch up the billing rate midstream, which could be a problem if this wasn’t highlighted as a possibility in the engagement agreement, but $500/hour for a former judge sounds close to right. Even the hours billed don’t seem so bad — they work out to 65 hours per month for the length of the litigation at issue. Where Majette runs into trouble is in her backup for the hours worked:

Majette initially submitted a statement with scant details. Eventually, she provided a more detailed statement in support of 180 hours worked on the litigation, the report said. Faulkner reviewed the invoice and challenged some of Majette’s entries.

According to the report, Majette failed to account for the $24,500 in fees she had previously received and reconstructed her time from memory and notes because she failed to keep detailed records.

Not crediting the client for money already received is a huge mistake. But the more interesting charge against Majette is her inability to provide detailed backup. Her work was “reconstructed from memory and notes”? Of course it was. When you work, you make notes of the time. You aren’t perfectly detailed at each step of the day because you’re too busy trying to do actual legal work. Making up your hours out of wholecloth is wrong, but suggesting there’s an ethical problem with billing based on contemporaneous notes would put most of the legal profession out of business.

Majette may or may not have committed wrongdoing, but the language quoted from the report highlights the problem with holding attorneys ethically liable for their billable hours as a general matter. The degree of specificity lawyers can provide from hand-scratched diaries handed to a secretary at the end of the week is always spotty. I once worked for a lawyer whose only diary entry for decades was “further work.”

Now, lawyers should strive for better than that, but a hard-line standard that precise, contemporaneous records are required for all bills is as impractical as it is inefficient. It’s the same sort of short-sightedness behind the client disdain for block billing, forcing lawyers to expend valuable time every day sorting out their time on every discrete task. We’re not like plumbers — if a plumber works on site for an hour, there’s a one-hour bill. There isn’t a form explaining:

.1 hr Turning off water
.1 hr Opening the pipes
.1 hr Removing obstruction
.1 hr Reconnecting pipes
.1 hr Turning on water
.1 hr Explaining the need to order a new part to be delivered in three weeks

But I don’t blame the clients or the ethics gurus. At the end of the day, this is the problem with basing fees around billable hours. The need for hyper-specific billable hours is just a waste of time fraught with possible honest (and dishonest) abuse. This is why alternative billing mechanisms, from flat fees to hybrid arrangements, make much more sense for all parties.

Except, of course, the partner still getting away with only writing “further work.” The status quo is pretty sweet for that lawyer.

Ex-Congresswoman Faces Possible Disbarment [Atlanta Journal-Consitution]

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