"1 unit - reading ROF article"
Time sheet padding is "endemic" in law firms, according to solicitors who have been airing their views on the topic.
The disclosures were prompted by last week's story about a NQ who was struck off by the Solicitors Disciplinary Tribunal for "inaccurate" and "misleading" time recording.
"A huge chunk of the legal profession would be struck off" if the tribunal's punishment was equally applied across City firms, said one lawyer. "If that sanction were applied across the top firms there would be very few people left with a practising certificate", claimed another.
Lawyers padding fees "has been going on since time immemorial" and "seems to be tolerated as legalised theft or fraud effectively," suggested one lawyer. Others commented that it was "rife".
The pressure of meeting targets was highlighted as a key reason for over-recording. "The fact that the first item in every team meeting is billing and nothing else matters means that people will always meet the target, even if they are putting down 5 units instead of the properly incurred 2 units", said one lawyer. Another concurred: "It's a clear, and expected, consequence of setting chargeable hour targets that a junior fee earner has no means of controlling, and giving bonuses to those that exceed them".
A lawyer who spent time at a major US firm said that eligibility for "very large" bonuses for associates kicked in at 2,000 billable hours, so "guess what happens with associate time-recording...As a client I would definitely not accept hourly billing from these firms - I know that they would be ripping me off something rotten".
Others agreed that 'time dumping' was "common" across the profession and pointed the finger of blame at the top brass. Partners treated clients "like cash cows", commented one, "charging for non existent work and creating utterly pointless 'file reviews' to pad junior hours that they knew the client would never question".
Some claimed that firms were aware of the issue but looked the other way. "I remember working for a top 20 firm and a partner would regularly time dump", said one lawyer. When an associate reported it to the head of office, they were told to "turn around" and "never mention" it again.
Another junior revealed that they worked with a time dumping partner who got away with it because "she runs the billing guide, negotiates the fee with the client and submits the bill to accounts". That partner raked in "a hefty bonus" while diminishing the realisation rate of the "honestly recorded time" by junior lawyers, while management turned "a blind eye to the manipulation of the billing guide", they said.
In a related criticism, some lawyers accused partners of transferring time from others' time sheets to their own. One lawyer said they worked with a client partner who used to "cancel half my recorded time and attribute it to himself."
Another said it was common practice for partners at their firm to dump "significant" amounts of time for "supervision" on files "on which they have no/minimal involvement". While a corporate partner at one firm "was notorious for his 5 hour time dumps on deals - always 5 hours," and the "entire department knew he was not doing the work".
A partner at a large international firm was allegedly instructed by a client that "always asked for a discount", but that partner made no bones with his colleagues about falsely "uplifting" the WIP "so that after the 'discount' he could bill full WIP".
Some believed that the severity of the wrongdoing depended on what sort of client files time was being created on. One lawyer suggested that inflating time on a corporate "mega-deal" while "still dishonest, is less bad than fake time entries on a fixed fee for a private client" in the regions, "who may not be as proficient in dealing with lawyers and challenging invoices etc".
Another said that US firms "get away with time dumping because their megacorp clients won’t even look at the time entries and will just pay the invoice without thinking twice".
One in-house lawyer in financial services agreed: "When people in the business instructed external lawyers to produce the lending packs they never, ever checked the bills. I decided to go do some file reviews (Top 15 firm). They'd billed £20k for a standard suite of lending documents. I managed to find £2k of properly billed time".
Some lawyers suggested that because "thinking time" was recoverable, it could also be a factor in padding time. One opined that it was "very difficult to attack consideration levels" as they "differ depending on the fee earner". One job could take one person 15 mins, "whereas another could take twice as long".
Another lawyer said they had been told by their firm, "If you think about a file in the shower, then when you log on you put down the time in the shower". One claimed that partners over recorded as they "seem to think in half-hour, rather than 6-minute units."
And it's not just the lawyers who are aware of what's going on. "Many years ago I was the billing assistant in various law firm. The perennial problem was the over and under recording of time by fee earners of all grades," commented the former employee.
Other respondents were happy to reveal the extent of the lax approach taken. "What lawyers say and mean are different things", said one lawyer. "Perusing file = Researching who to put in my Fantasy Football team".
Another associate, who believed that neither their supervisor or the client checked the invoices, would take a "creative" approach, with narrative entries such as "Bamboozling Counsel with long submissions - 3 units. Telecon with Flimflamming oppo lawyers - 2 units".
One summed up how they viewed the profession's take on it: "Every lawyer sails a little close to the wind when they hoist up the time sheets".
Do you inflate your time-sheets? Take our poll below. Make sure no-one's looking over your shoulder:
Comments
38
9
Not just law firms but any professional practice where time is being sold to clients there will be uplifting. Where fixed fees are used for easy work, it's amazing how the WIP nearly always matches the fee. Partners are usually the worst and time dump on jobs they know they can get away with as ultimately they see themselves as responsible for the client relationship and can self-justify.
19
19
The fault lies with the clients and other buyers of legal services in not insisting on fixed fees and capped quotes. It's your fault, in buying services from a competitive industries with hundreds of providers, in giving the lawyers a blank cheque.
Only an idiot would instruct a law firm without insisting on a cap or a hard estimate.
Unfortunately, in many cases the buyers of legal services don't care. For example, many PE firms will instruct the lawyers to act on the fund formation but the fees will be paid by the investors in the PE fund being raised who don't get to check the bills.
13
6
Over any few years the target in any. professional practice selling time flip flops between chargeable hours % and % recovery. Totally unclear if either has any benefit other than supressing the other? But seems to keep a board room happy.
16
7
Why us In-House folk seek a fixed fee on transactional work and heavily interrogate opaque line-item descriptions on non-fixed fee work. A complete pain in the posterior, but unfortunately a reflection of realities of transacting.
25
8
Martin Lewis is to investigate the issue of time padding by the legal profession.
47
9
No wonder I didn't meet my targets as consistently as my colleagues. Do people really do this?
15
10
No wonder I didn't meet my targets as consistently as my colleagues. Do people really do this?
67
8
When I was an NQ I was honest to a fault with my billing and all it did was mean I didn't get a bonus for my first year and during my first appraisal, my supervising partner encouraged me to basically pad time (without out-and-out saying it - he just said "make sure you put ALL your time down" and repeatedly said that my time entries were surprisingly low).
In an industry where the people who bill the most succeed the most, it is extraordinary to me that ANYONE would be surprised by the extent of the rampant time padding which happens. All clients should be making us stick to our estimates (within reason where the unexpected happens) and interrogating the life out of every billing guide they receive to make sure it's all properly incurred time. It's the only way to make this stop. It will never be driven from the top down.
12
8
False accounting via timesheets is ubiquitous.
33
6
Careful filling out that poll the SRA gestapo will be on to you....
14
8
You mention that with fixed fee agreements often the time recorded/ WIP matches the fee and you suspect time dumping
The reason for that in some firms is inflexible time recording and billing software.
Say the fixed fee is 10k but (a) the time spent is 12k, or (b) 8k, you will bill 10k per the agreement in situations (a) and (b). In case of (a), you will write off 2k. However, in situation (b) some software systems create an issue if you (properly) invoice the agreed 10k. At least in the old days you had to “add” 2k in time in the system to be able to send out the invoice (bc the accounting software was too stupid for fixed fee agreements). On the narrative you would show the narratives for 8k worked (so the client can negotiate a lower fixed fee for the next job). ;-).
So no cheating. Just a work around for stupid software.
39
12
There is a hairless litigator reclining in the Holburn Viaduct who claims that he bills 3,000 billable hours every year. Well he does bill 3,000 billable hours a year but he certainly doesn't perform 3,000 billable hours of work a year.
14
7
Lawyer answer his own questions and charge the client for answering the question not asked.
40
8
Ah the old “make sure you put all your time down”. And remember that in London, there are 25 hours in a day.
35
13
There’s a point here that, in practice, most top tier London firms will be operating fixed fee models now (even where the billable hour is still the time recording metric) . So, even if hours are being padded or rounded up, the costs are not being passed on to the clients - they are just being written off and hitting the firm’s recovery metric. So, not sure it can quite be classed an endemic of fraud as some of the comments cited would have you believe.
19
11
From the comments here I don’t see anyone denying that this goes on. Advice I received over the years - “be more selfish” with time recording, the old classic “get all your time down.” I once interviewed with a place that told me when their target was 1,500 everyone hit that. It recently went up to 1,600 but don’t worry because everyone has hit that too no problem…
30
4
As others have said I think the over-recording is highly department specific.
I know of teams where the juniors carry out a high volume of relatively low value matters and can be "persuaded" by partners who haven't undertaken the lower end work themselves for a decade and have no idea how long it will take (let alone how long it will take someone with less experience) to quote low to win the work and then find themselves under recording for fear of it looking like it took them too long and having to justify the write-off.
I was certainly guilty of under recording in the past and probably still do. What ground my gears is seeing the same certain people leave at 5.30pm every day, not log back on but miraculously hit their target...
25
7
Can’t believe the amount of inflated and fake billing I can get away with at Paul Hastings.
21
7
Private practice law firms don’t sell legal services; they sell the time they take to perform those legal services.
While that remains true, the industry will always be in conflict with its own client base and it will continue to punish lawyers for efficiency, innovation and taking time for non-directly fee earning tasks like business development, training and supervision.
26
5
Fixed fees create their own perverse incentives. I've encountered partners bullying trainee staff for honestly record hours worked on the partner's matters and making that partner's recovery rate looking bad. He expected his people to miss their monthly billable hours targets for him (he always made his!). Those who recorded their time honestly were given hostile silent treatment.
17
7
I knew a lawyer who could bill 25 hours in a day. Was never questioned.
12
11
If you agree a fixed fee, the amount of time recorded (whether too high or low) is surely completely irrelevant? If I’m the client and I’ve agreed £10k for a job, and ultimately get billed that, then surely it’s irrelevant if the fee earner has dumped 10x that figure on the file - it just means their recovery will look terrible internally.
13
3
As Private Eye would say:
Lawyers pad time entries.
In other news, bear admits to defecating in woods and Pope is apparently affiliated to Catholic Church…
33
5
Many years ago, I did a training course in the MC firm I was in then about time recording and the trainer pointed out that although padding timesheets does happen, in his experience, it is more than offset by lawyers (especially junior ones) under-recording time because they want to look efficient or because they are embarrassed about how long it took them to actually find the answer to a question or not wanting to affect their recovery rate or whatever. Based on my personal experiences I am also inclined to agree. Of course people are much more likely to be forthcoming about under-recording than over-recording but I personally saw a lot more under-recording than over-recording.
8
14
Except for "bet the house" type M&A or litigation cases, most top firms operate via fixed fees and other multi-transactions arrangements with sophisticated and demanding clients. For those that just enjoy a beat the lawyer pinata game, grow up and stop regarding clients as dumb. Padding may be an issue, but the logic of passing on the padding onto clients is rather weak and detached from reality.
12
5
Hourly rate low, work slow.
8
9
Please do not confuse American lawyers (including non-Americans who work in American law firms) with the rest of us who are mostly honest folks
8
7
Hourly rates don't work.
9
6
I did my first two years on a joint New York-law/English-law banking team at a top international shop, in the financial center of a Europe-adjacent jurisdiction. The Yank and Brit partners told me that if a matter-related idea popped into my head in the shower, I had to bill that time. More senior associates billed in minimum half-hour blocks. Invoices were issued without time entries.
7
6
Remarkable poll that asks people to incriminate themselves
9
7
I had a partner in my formative years always put time on my files on a Monday morning because he had been thinking about the matter over the weekend. Not doing any work or imputting anything onto the matter.... always made me laugh right up to the point my time got written down and he had full recovery. Oh the joys of being an NQ
15
5
There was an intellectually-limited partner at a now public firm who regularly returned from a week's holiday (armed with nothing more than a phone) making David Dickinson look pasty and with 80 hours on the clock.
The Nelsonian blindness on the parts of the other partners was equally staggering.
10
5
"Padding". Otherwise known as billing fraud.