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Some Law Firms Are Losing Billing Cash Cows Due To COVID-19

Lawyers should prepare for the possibility that some billing opportunities may disappear as clients and courts learn lessons about efficiency while operating during the ongoing pandemic.

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This website has already detailed how law firms are adapting to meet challenges posed by the ongoing COVID-19 pandemic. Indeed, law firms have implemented work-from-home programs, communicated with clients and counsel through videoconferencing apps more often, and taken other steps to operate in these uncertain times. The ongoing COVID-19 pandemic has also eliminated many billing opportunities for numerous attorneys, and this has had an impact on the revenue of many law firms.

As mentioned previously in this column, court appearances are usually a cash cow for law firms. Even though court conferences may only take 10 minutes or less to complete, attorneys often need to wait in court for hours before a matter is called for a conference. Attorneys are often able to bill all of the time they spend in court for a conference, even if lawyers are just waiting for conferences to be called. In addition, attorneys usually need to spend an hour or two traveling to and from a court conference. Although clients have different rules about how much travel time is billable, attorneys are typically allowed to bill their clients for at least a portion of the time they spent traveling to and from conferences.

However, at the beginning of the pandemic, many courts adjourned numerous conferences, likely because they did not wish to hold conferences in person and did not have the infrastructure to hold conferences remotely. As time passed, courts have mostly been holding conferences through telephone and videoconferencing apps. Although there were some complications with people getting used to the technology at first, conferences by remote means seem to be going much more smoothly now.

Nevertheless, conferences by remote means do not present the same billing opportunities for firms as traditional in-person court conferences. When courts conference matters through remote means, the parties are usually scheduled to conference a matter at an exact time. As a result, attorneys are unable to bill as much time waiting for a conference as they could when they were in court before a matter was conferenced. In addition, since remote conferences do not require any travel time, attorneys have been missing out on billing travel time like they were able to with traditional court conferences. Although attorneys used to be able to bill several hours for attending a court conference, they are likely able to bill only 15 to 30 minutes of their time for court conferences in the present environment.

The way depositions have been conducted since the start of the ongoing pandemic has also impacted another traditional cash cow of billing for law firms. Attorneys used to be able to bill at least a portion of their time traveling to and from depositions just as with court conferences. For some depositions, attorneys can bill a substantial amount in travel time. Indeed, while I was working at a law firm that handled a number of mass torts matters, I would sometimes spend many hours traveling to and from depositions hundreds of miles away. Sometimes, the travel time billed to a client would pale in comparison to the time actually spent at depositions.

However, most depositions are also being conducted by remote means now in order to promote social distancing. As a result, attorneys are able to call into a deposition from home and have not been billing their travel time as they were in the past. This must be having a substantial impact on firms that rely on such billing for a considerable amount of their revenue.

Some attorneys may believe that disruptions in their billing may be temporary and that as operations return to normal, traditional court conferences and depositions will resume. Of course, some matters are simply easier to conduct in person, and it is altogether possible that court conferences and depositions will begin to occur in person more frequently over the next several months as many states gradually reopen. However, it is possible that the COVID-19 pandemic may permanently change the way certain tasks are conducted so that traditional billing cash cows lost during the pandemic may be permanently disrupted.

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For instance, I have heard more than one court attorney relate that they see no reason to drag all of the parties to court for run-of-the-mill discovery conferences ever again. Conferencing routine and noncritical matters by remote means is simply more efficient, and it might not be worth it for all of the attorneys to appear in court for such matters. Furthermore, clients may require attorneys to continue conducting depositions by remote means. Clients may not wish to spend massive sums on travel time and travel costs for attorneys to attend depositions when they are now familiar with how depositions can be conducted remotely at a much cheaper cost.

In the end, many law firms have struggled with issues caused by the ongoing COVID-19 pandemic, and the current environment has restricted the ability of certain shops to bill hours. Some attorneys may believe that such issues will begin to disappear as conditions normalize as COVID-19 restrictions are eased. Nevertheless, lawyers should prepare for the possibility that some billing opportunities available to them months ago may disappear as clients and courts learn lessons about efficiency while operating during the ongoing pandemic.

Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

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