The number one reason that small firms and solos actually can compete with Big Law firms is cost. At bottom, the capital required to operate a law firm is relatively small and the profitability curve (if properly managed) is relatively immediate. The other reason small firms can compete effectively in many matters (other than bet-the-farm sort of litigation) is that we can market and cultivate trust through honest, accurate and informative billing. Too many mid-size and small businesses leave their Big Law attorneys for the same reason – they’re not sure they trust them and not sure the advice they’re given is objective.
Having been at a firm, it is not that I’ve met many (in fact, very very few) dishonest attorneys, but that the billing pressure is immense. This prevents the billing attorney from doing the non-billable marketing work that is necessary for long-term and mutually beneficial working relationships.
Below is a cautionary tale.
Absolved by Firm, Ex-Holland & Knight Partner Faces Ethics Case re Timekeeping
Posted Dec 22, 2008, 03:19 pm CST
By Martha Neil
After Matthew Farmer complained in 2005 that a fellow partner at Holland & Knight’s Chicago office had allegedly added hours to a client’s bill for work in a litigation matter that Farmer and others didn’t actually perform, the law firm said Edward Ryan had done nothing wrong.
But now the Illinois Attorney Registration and Disciplinary Commission has filed a complaint against Ryan that reiterates much of Farmer’s accusation, according to the Wall Street Journal Law Blog.
The ARDC complaint contains one count alleging that Ryan falsified time on a matter on which Farmer worked, as well as two counts alleging that Ryan made false representations to a tribunal.
It contends that Ryan, while representing, in a federal copyright infringement case, an affiliate of a real estate development company owned by his brother, initially recorded time he claimed to have billed personally on the litigation matter. But then, during a period from August 2002 to March 2004, Ryan revised firm time records to shift 1,389.10 hours of the 1,670.50 hours he said he personally had worked on the case to other timekeepers, including attorneys, paralegals and support staff.
Only 281.40 hours of the 1,670.50 total Ryan said he worked on the case during this period actually was billed to the client as Ryan’s time, and the rest was added to other timekeepers’ bills, the complaint contends.
However, it lists a total of about 2,000 hours as the amount of his own claimed time that Ryan allegedly added to other timekeepers records, not 1,389.10 hours. (Perhaps this discrepancy was due to the presumed difference in billable hourly rates for Ryan and the others on the litigation team?) Included in the 2,000-hour total was 355.90 hours of Ryan’s time that he allegedly added to Farmer’s billing on the matter.
When he shifted his own recorded time to other individuals working on the matter, Ryan knew “that those services had been provided, if at all, by Respondent,” the complaint states. It contends that his alleged time-shifting violated legal ethics rules prohibiting conduct involving dishonesty, fraud, deceit or misrepresentation and “conduct which tends to defeat the administration of justice, or to bring the courts or the legal profession into disrepute.”
A 2006 Wall Street Journal (sub. req.) article about the H&K billable time dispute says Farmer blew the whistle on Ryan because he feared he himself could be violating legal ethics rules if he kept quiet, since the allegedly inflated hours included some of his own billable time. He also took a 7 percent pay cut to move to a small firm, Cohn Baughman & Martin.
In addition to notifying the firm, Farmer also notified bar authorities and a trial court of his concerns about Ryan’s timekeeping, the WSJ article says.
Ryan, who was admitted to practice in 1968, left Holland & Knight earlier this year and could not be located for comment, according to WSJ blog post. (His ARDC listing at H&K apparently has not been updated since he left the firm.)
Because it’s difficult or impossible for a client to determine how much time a lawyer actually spent on a particular task, “ bill-padding is the perfect crime,” professor William Ross of Samford University’s Cumberland School of Law told the WSJ in 2006.
“He says that in a billing survey he conducted in 1996, two-thirds of the attorneys (and three-fourths of the clients) reported knowledge of bill padding,” the article recounts.
An unnamed spokesperson for Holland & Knight noted that the firm is not a party to the ARDC case and that Ryan is no longer with the firm, but otherwise declined to comment, the WSJ blog post states.
Posted by bflaw 
Posted by bflaw 
Posted by bflaw 
