Double Billing in the Law: How to Avoid Unethical Practices

For attorneys, billable hours are key to profitability, yet billable work accounts for only a fraction of the workday. According to the 2022 Legal Trends ReportLawyers only spend 2.6 hours on billable tasks in an eight-hour workday. To meet the high demand for billable work, efficiency is key. But when it comes to legal billing, there’s a difference between maximizing productivity and crossing an ethical boundary with double billing.

Why and how are legal clients billed twice?

In the following post, we outline the basics of double billing in the law – and emphasize why lawyers should be able to recognize and avoid the unethical practice. We will also look at some common causes that can lead to double billing by attorneys, intentionally or unintentionally. Finally, we look at strategies lawyers can use to prevent double billing.

What is double billing?

In law, double billing occurs when an attorney charges two or more clients full price for work performed during the same period. So, double billing means that a lawyer is billing for more hours than they actually worked. This can include billing two clients for research related to individual cases, administrative errors and more.

Duplicate billing is an inherently unethical practice, but it can also be difficult to detect and control. It is important for lawyers to recognize and avoid double billing. You will maintain your professional integrity while meeting your ethical responsibilities to clients.

What examples of double billing are there?

For attorneys, double billing means more than one client being billed for work done at the same time. But there are many ways it can happen. Because double billing by attorneys varies from case to case, it is difficult to pinpoint some cases.

To help you, here are some hypothetical examples of common types of double billing by attorneys to avoid:

Calculate fees for work during the trip

One of the most common scenarios in which lawyers double-invoice their clients is on business trips. When a lawyer travels on business for a client, it makes sense that he should charge for travel time. Suppose a lawyer spends part of his time sitting on a plane doing paid legal work for another client. This could be seen as double billing.

In this case, if the attorney spends two hours on the plane for Client A while simultaneously doing two hours of billable work for Client B, he cannot bill Client A and Client B for the same two hours each.

In such a situation, there are a few possible solutions. The most important point is that the lawyer cannot charge for more hours than actually worked.

Of course, the obvious answer would be that the lawyer is not doing any work for client A during the trip. Then he only bills client A for the travel hours.

However, you could also use the time productively while achieving cost savings for both customers. For example, instead of double billing, the attorney could bill each client for an hour. The lawyer can make optimal use of his travel time and both clients benefit from the fact that they save on their legal fees.

Charge multiple clients for the same work

What if an attorney has two clients with similar legal issues and they legitimately need to spend time researching the same topic for both of them? Even if it makes no sense for the lawyer to carry out the same research twice, he cannot invoice the costs twice either.

Let’s say an attorney spends two billable hours researching a topic that applies to both Client C and Client D. In this case, even though both clients benefit from two hours of the attorney’s research, the attorney should not charge both clients for the full two hours each, as this would result in double billing.

Instead, the attorney could bill just one client, or bill each client for an hour. Again, this would allow the attorney to be productive and pass cost savings on to their clients without double billing.

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Inaccurate billing due to administrative errors

There are also cases where customers are overbilled due to administrative and billing errors.

Here are a few key examples:

  • Duplicate bill submission. When invoices are processed manually, there is an increased risk of errors, for example if an invoice is accidentally submitted (and paid) more than once.
  • Time tracking error or time refill. Whether it’s an innocuous error due to manual time tracking or a problem with rounding up and “filling in” billable hours, inaccurate time tracking results in customers paying more than they actually received. (Note: Using a timer like in Clio Manage can help avoid such mistakes.)

Using the right technology and systems can help prevent unnecessary billing errors. Read more about best practices for law firm billing here.

Why double billing by lawyers is unethical

While double billing can be difficult to detect – due to the confidentiality of billing records and the fact that clients do not have visibility into the charges being billed to their attorney’s other clients – it is unethical. Charging multiple clients for the same work is fraudulent and a distortion of an attorney’s time and services.

Lawyers are obliged to comply with the professional rules for lawyers. While it is important for attorneys to know and follow the precise rules that apply in their specific situation and jurisdiction, double billing is undeniably an unethical practice.

In the United States, the American Bar Association’s (ABA) Model Rules of Professional Conduct contain model rules of legal ethics, many of which have been adopted by individual states. Under Model Rule 1.5 regarding fees, attorneys have an ethical responsibility not to charge their clients fees or expenses that are “unreasonable”.

The ABA Standing Committee on Ethics and Professional Responsibility Formal Opinion 93-379 provides further guidance, noting that:

“(In) matters where the client has agreed that the fee shall be calculated taking into account the time expended by the attorney, an attorney shall not charge for more time than he actually spends on a matter, unless rounding to the minimum.” Periods (e.g. quarters or tenths of an hour).”

Is double billing illegal?

Double billing by attorneys is unethical and can have serious consequences for attorneys. This can result in disciplinary action against attorneys from their state bar association. In situations where it turns out to be fraud, you may be subject to legal penalties.

Double billing and customer relationships

It’s also important to consider double billing from the customer’s perspective. Double billing shows a lack of respect and transparency towards customers. Whether or not attorneys are caught, this practice is at odds with maintaining strong client relationships – which are critical to a law firm’s long-term success. On the contrary, instances where you can reduce fees between clients for similar research can result in a better client experience.

How to avoid double billing with Clio

Understanding the most common causes and ethical considerations of double billing helps attorneys avoid instances where they might otherwise have double billed.

For example, an attorney who understands that billing two clients for work done concurrently is double billing can make a conscious decision not to do so.

But what about cases where double billing is caused by simple human error, such as when an identical invoice is sent to a client twice, or when extra hours are incorrectly recorded on an invoice? While such scenarios may not be intended, they still result in double billing and customers suffer.

The good news is that using the right systems can reduce the risk of human error and minimize the risk of accidental double billing.

For example, Clio Manage’s legal billing software simplifies lawyers’ time tracking, leaving less room for error or accidental time-outs. Using Clio to create, send and manage customer invoices eliminates the worry of accidentally sending duplicate invoices. And by streamlining billing and invoicing processes, Clio gives attorneys more time to devote to billable hours for their clients.

Learn more about Clio billing (and faster payments) here.

Final Thoughts on Double Billing

Simply put, lawyers should only charge for hours actually worked. Dual billing for legal clients is not a shortcut to more billable hours, nor is it ethical.

It can be tempting to charge multiple clients for legal services that benefit everyone. But billing different clients for the same amount of time goes against the rules of professional conduct that attorneys follow — and can erode the trust and transparent relationships that today’s clients desire.

Recognizing the basics of double billing can make it easier for attorneys to spot. When faced with a possible double-billing situation, it’s best to think about how to ethically invoice each customer. And the right systems can help to avoid unintentional double billing.

Clio Manage simplifies legal time tracking and billing, allowing lawyers to better prevent accidental double billing or time tracking errors.

Lawyers who find themselves in a situation where they can work more efficiently to the benefit of multiple clients may also find new ways to provide value and cost savings to their clients.

Try Clio for free and see how it can simplify time tracking and billing today.

Categorized in: Accounting

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