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Inflationary Minimum Billing Increments

Posted by Judie Bronsther | May 19, 2014 | 0 Comments

It is common practice for law firms to bill in six-minute (.10 hour) billing increments. Legal service consumers should make sure that law firms are not artificially inflating their legal bills by slicing their efforts into many separate tasks and thereby billing each entry (phone call, email, routine letter and internal meeting) at the minimum billing increment of six minutes even if it lasts only a moment or so.

Communication entries involve, in most cases, actual time intervals of less than one-tenth of an hour.  A study by the University of Brighton Information Services revealed that the average time to write a message is about four (4) minutes and the average time to read a message is about 30 seconds.  Consistent with that study, Magistrate Judge Debra Freeman in Lee v. Santiago found that billing six (6) minutes for each email was excessive.  Also, In re Pettibone Corp., 74 BR 293 - Bankr. Court, ND Illinois 1987 the Court noted:

The actual time spent on each item should be recorded.  Except as noted below, small amounts of time should not be uniformly reported as a minimum block of time. In re Four Star Terminals, Inc., 42 B.R. 419, 426-27 n. 1 (Bankr.D.Alaska 1984).  For example, the reception of any communication should not be routinely recorded as taking a minimum of one-fifth (0.2) of an hour.  In re Sapolin Paints, Inc., 38 B.R. 807, 814 (Bankr.E.D. N.Y.1984).  Also, short telephone conversations should not routinely be recorded as .25 or .2 hours. Four-Star Terminals, 42 B.R. at 426-27 n. 1. See also In re Tom Carter Enterprises, Inc., 55 B.R. 548, 549 (Bankr.C.D.Cal.1985).  The telephone company's rates are predicated upon the premise that most telephone calls terminate within three minutes.  Sapolin, 38 B.R. at 814.  If very short phone calls are routinely recorded as taking 12 or 15 minutes at rates ranging from $110 to $150 per hour and the attorney makes a number of calls, the distortion in the hours claimed and the cost to the estate [will be] substantial . It would not be objectionable to use one-tenth of an hour as the minimum charge for a telephone call or other service, and that minimum is in common use.  However, if telephone calls comprise a large portion of the total fee petition, time entries of .1 hour might also be subject to discount.  See Sapolin, 38 B.R. at 814.

About the Author

Judie Bronsther

Ms. Bronsther began her career in 1979 as an associate with Finley, Kumble, Wagner, Heine, Manley & Underberg specializing in corporate finance. In 1984, she joined forces with a client, Empire Securities, a brokerage house specializing in oil and gas transactions, and became Executive Vice President and General Counsel. In 1989, she joined Kaye, Scholer, Fierman, Hayes and Handler. Ms. Bronsther graduated from University of Rochester, magna cum laude, and New York University School of Law. Ms. Bronsther has written extensively on the subject of legal cost control and lectures frequently on this subject.

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