How to Resolve a Billing Dispute with an Attorney
Ever received a bill for legal services that takes your breath away? It’s a common
experience. In fact, billing disputes between clients and lawyers are one of the
leading complaint types reported by America’s state bar associations.
Fortunately, with the right preparation and approach many billing complaints can
be resolved simply and effectively between you and your lawyer—without resorting
to outside intervention. Why? Because legal fees typically have a substantial margin
of profit built in. Making adjustments is relatively easy for law firms, so working
it out with you is far more appealing than the expense and potential damage to professional
reputation that may come if you’re not satisfied.
This How-to offers guidelines for resolving billing disputes with your lawyer, and
shows how PeopleClaim's online dispute resolution system can help you assert your
rights and get your bill whittled down to what’s fair and reasonable.
Common Problems
- Double billing (frequent; due
to human error in data entry)
- Lack of billing detail
- Hard-to-understand billing statements
- Runaway costs, including:
- too many lawyers assigned to your business
- costs associated with turnover in legal team
- unneeded research or use of consultants
- extravagant / unwarranted expenses
- inflated numbers re meeting lengths, phone calls, lawyer time vs. clerical, etc.
Step One: Know your rights.
Client billing rights vary according to state laws, and it's a good idea to ask
your state bar association which laws apply to your situation. (You can find your
state (and local) through the American Bar Association’s
online directory.) In most cases a client has more rights than are identified
in a lawyer’s legal fee agreement.
Here are some of the rights you could reasonably expect:
- A written fee agreement, including
- fee basis (e.g., hourly, retainer, flat fee, or contingency)
- if hourly, what rates you’ll be charged for lawyer time vs. paralegal
time vs. clerical time. Tip: be sure to clarify whether the attorney
intends to charge you for the time spent preparing your bill. Legitimately this
is lawyer overhead, not your expense.
- anyincidental expensesyou'll be responsible for (e.g. copies, faxes, courier
or messenger service, postage)
- an estimate of anticipated costs before signing a contract for services
- prompt billing (so you’ll have a heads-up and can prevent racking up large
amounts that will be subject to future dispute)
- an understandable billing format: complex and lengthy printouts with unfamiliar
abbreviations may unintentionally (or intentionally) deter clients from careful
examination of charges
- an honest and accurate accounting of work performed on your case
- an itemized breakdown of any hourly charges on your statement (A bill that
says "Professional Services: 12.2 hours @ $280" is called “block billing” and could
be inflated.)
- an explanation of any activities and charges that are unclear (e.g., if for
research or phone calls, what was the purpose and how did these add value to your
case?) Note: time spent explaining or disputing a bill should not be billable.
- advance notice of any increase in fees Tip: Examine January billing closely;
traditionally, January is when law firms apply any fee increases. Note: In some
states fee increases are not legal unless both parties agree.
Remember: In most states you are guaranteed more rights than are specified
in a typical legal fee agreement. For detailed information about client billing
rights contact your
state bar association.
Next: Review your fee agreement and talk to your lawyer.
Examining your fee agreement may explain what’s puzzling about your bill. If not,
you need to talk with your lawyer directly. He or she may be may be able to solve
your problem quickly if it’s an easily recognizable mistake such as double billing.
If not, and you believe the charges are inaccurate or unfair, you’ll want to put
your complaint in writing and seek resolution.
Important: If you think your lawyer is stealing from funds intended for you,
you need to report this to your local bar association, and possibly your state attorney
general’s office.
How PeopleClaim can help: Filing your complaint online at PeopleClaim.com
is an effective way to document details and get it to your lawyer, and it can add
some pressure and urgency: you can choose to have your complaint post publicly if
the problem is not resolved within ten days. Besides being an incentive for the
lawyer to fix your problem quickly, public posting opens the door to communication
with other claimants who may have valuable experience dealing with lawyers’ charges.
PeopleClaim’s negotiated process of settlement allows exchange of offers and counteroffers,
a practical alternative to additional legal expenses (which could easily exceed
the amount you’re disputing). For example, a Florida man used PeopleClaim to challenge
a lawyer’s bill for $3,275, and was able to settle within 10 days for $1,190, an
adjustment of nearly two thirds of the billed amount.
Do’s and Don’ts
DO:
- Keep a record. Write down dates of meetings and phone calls—start time and end time
and what was discussed—and save all documents, canceled checks, and email or hardcopy
correspondence.
- Act quickly after receipt of a bill you question. It’s much easier for the law firm
to make adjustments to your bill if you haven’t let the disputed amount compound
and become too large. Also inaction on your part may signal agreement to their charges.
- Be pleasant and calm, but make it clear that you know your rights.
- Put your complaint in writing if you’re not able to resolve it with a phone call.
Be specific: refer to line items in the bill.
- Make it clear that you know your rights. Refer to specific terms of your written
fee agreement, if you have one.
- Be specific about what you want: name a number you believe is reasonable for the
disputed amount.
- Set a deadline. (Two weeks is standard.)
- Make a good-faith attempt to reach a negotiated settlement before suing your attorney
(expensive), or seeking arbitration services through your local bar association.
How PeopleClaim can help:: PeopleClaim's online process helps you
state your complaint and assemble all relevant facts: you can attach text documents
or photos, and even have the system make a timeline for you. You can name the adjustment
you’re seeking, and establish a deadline for resolution.
Above: Stating your complaint
DON'T:
- Don’t use legal terms unnecessarily. You won’t impress the lawyer, who knows his
language better than you do, and you may say something that weakens your case.
- Do not threaten or overstate your case.
- • Do not defame the lawyer or his/her profession. Be polite and truthful, and avoid
inflammatory words like "liar," "shark," "shyster," or other words that aren’t necessary
to your complaint.
Add some extra oomph to your complaint
PeopleClaim offers an arsenal of powerful optional services to help get your problem
resolved.
- Choose PeopleClaim’s Public Posting option. Your complaint will post on the
Internet if it’s not settled in 10 days.
- Invite a free consultation from lawyers through PeopleClaim if you feel enough
is at stake to sue your lawyer. (This is voluntary, and any further engagement would
be between you and the lawyer. PeopleClaim is not an attorney referral service and
does not participate in any fees you may agree to.)
- Bring your case to the attention of relevant professional associations and government
regulators PeopleClaim makes this easy for you. For example, if you were to
choose this option your complaint could be sent to your local and/or state bar associations;
also to your state's Supreme Court and/or attorney general if larceny or other illegal
activity is involved. Note: Filing a claim through a bar association or government
agency will require a separate process, which you'll need to follow through on your
own if you're not contacted by the agency directly.
Above: Send your complaint to the bar association.
An ounce of prevention . . .
Looking ahead, be sure you’re doing what you can to check the reputations of lawyers
and law firms before you engage their services. Your
state bar association offers directories of members, where you can check
their professional status for things like disbarment or disciplinary history. If
the lawyer has been disciplined by the bar, you may be able to access specific details.
You can also ask if such actions may be pending but not yet determined or on record.
Your local newspaper’s archives may have relevant information if a lawyer’s name
has been in the news. For additional perspective you can always check names of lawyers
or law firms via search engines. And it’s worthwhile checking PeopleClaim.com to
see if there are unresolved complaints in our system against a lawyer you’re considering.
When you’ve found a lawyer you’re comfortable with, be sure to:
- Discuss fees before engaging services. Go over compensation and fee schedules
and ask questions. If there’s anything you’re uncertain about, don’t leave it that
way.
- Get a fee agreement in writing. Don’t hire a lawyer without one. A signed
agreement means there should be fewer surprises when the bill arrives. And if there
are, your complaint, referring to the specifics of the agreement, may be all it
takes to set the matter straight.
These two preliminary steps are important: ignorance, assumptions, and failure to
ask questions about fees are a primary cause of many of the disputes about lawyers’
charges to clients.