Billing Excesses and Bad Press

There has been a flurry of activity in the press this week regarding a lawsuit alleging  overbilling by a major law firm and references emails thought to be “funny” between some law firm employees.

I have collected articles on billing fraud and overbilling throughout my almost 20 year career in ebilling.  These situations typically fall into the category of billing irregularities (some resulting in criminal penalties),  or outright embezzlement within law firm or law department.  Some of the stories are so outrageous they are hard to believe.

The legal ebilling discipline exists as the result of a very serious fraud situation that occurred in California in the mid-1980′s.  To read more about it, see The “Alliance” Insurance Fraud: A Case Study in the Civil Prosecution of Business Crime, by Neil P. Getnick and James P. Schratz.  If you have ever wondered why insurance companies were the first users of bill auditing and legal ebilling, this case explains why.

Another great read is The Honest Hour:  The Ethics of Time-Based Billing By Attorneys by William G. Ross, available on Amazon.

On one hand, law firm billing staff frequently lament measures used by clients during electronic bill review, believing the sole reason for legal ebilling is to cut fees to the bone.  On the other hand, bad press like this current case underscores clients’ belief that they are being overbilled for legal services and need strict control over their bill review processes.  I believe the truth lies somewhere in between.  My experience is that clients are looking to pay fairly for the services provided to them in accordance with their billing guidelines, and most of the billing irregularities I’ve encountered are the result of poorly trained staff.  While there are exceptions, I believe it is important recognize these are exceptions and not the norm.

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