Billed by the Hour: What are you paying for?

Legal billing is simultaneously one of the most unique aspects of the profession and the most frustrating for clients. Most attorneys employ “Hourly Billing” which means that, based upon a stated hourly rate, you are billed for the amount of time the attorney spends on your case. The most common method is to apply a standard increment of time to each file.

For example, assume John Attorney bills an hourly rate of $60. A full hour of his time will cost $60. If his client talks to him for half an hour on the phone, that time will cost $30. John Attorney bills in increments of 6-minutes – 1/10th of an hour at a time. Whether a client talks to John for 2 minutes or 6 minutes, he is billed for a full 6-minutes - $6 dollars. If the client talks to John for 7 minutes, he is billed for 12 minutes - $12 dollars. 
 
If John Attorney spends 3 minutes talking to his client on the phone, spends 15 minutes drafting a letter, and another 20 minutes talking to another attorney regarding the matter, he spent a total of 41 minutes working on the case, and will bill the client for seven 6-minute increments - $42. 
 
The question is, though, what is the client paying for?
 
Throughout a case, an attorney wears many different hats. He is an investigator, an advocate, a counselor, an accountant, and an expert of laws. His overall duty is to shepherd the matter to a resolution that is acceptable to the client. Exactly what the client pays for, then, can be broken down into four categories: 
 
Experience – The number of years the attorney has been practicing, his familiarity with the court room or negotiation, and even the time he has spent dealing directly with clients can affect an attorney’s effectiveness. An attorney with more experience will often be better equipped to meet an issue with less background and with more confidence than a less-experienced attorney. 
 
Expertise – The attorney’s knowledge of the specific matter, industry, or type of law at issue is a critical factor in his effectiveness and ability to shepherd the case. Whether it is an expertise in the construction industry, litigation, or a matter involving a governmental agency, the attorney’s expertise can greatly affect the outcome. 
 
Efficiency – Similar to all other professions, some attorney’s are more efficient than others. They can write a letter faster, research in less time, or weed out the critical legal issues before the initial consultation is complete. Clients can expect to pay more for an attorney who can get the job done in half the time. 
 
Reputation – An attorney’s reputation is important both in and out of the courtroom. The respect of judges and fellow attorneys can lead to more favorable resolutions, while name recognition in a particular industry or area reflects directly on the lawyer’s clients. A good reputation comes with a premium. 
At the end of the day, the client is hiring an employee when he selects an attorney. The attorney is paid to know his profession and to use that knowledge to effectively carry out the client’s wishes. 
 
What are you paying for? You are hiring a professional that can walk you through the unknown, and often dangerous and costly, legal landscape. Every time the attorney spends time on your case, whether talking to you, drafting a letter, or going to court, he is charting a course, evaluating the outcomes, and keeping his eye on the client’s wishes. 
 
Our goal at Einterz & Einterz is not to make money from our clients, but to make money for our clients. We aspire to be high producing, beneficial employees who add to your bottom line rather than detract from it. We want you to receive helpful and valuable services, and direct every action toward that goal.