Another cautionary tale for trial lawyers

At a recent trial in Los Angeles, a former client and attorney, Gerald Klein of Klein & Wilson, won a major victory in a legal malpractice that pitted his client, ReadyLink Healthcare, Inc., against its former attorneys, Lewis Brisbois Bisgaard & Smith.  ReadyLink, a Nevada-based nursing registry,  claimed Lewis Brisbois committed malpractice and overbilled - almost $5 million! - in several trade secret actions that it lost against two former employees.  The complaint also alleged the firm's attorneys were disorganized and unprepared.    After two months of trial, the jury awarded ReadyLink $6,007,567.83.

I talked with Gerald Klein about the case.  He believes the practice of overbilling is widespread.  An attorney may overbill, but when the client pays the bill without question or objection, the attorney feels free to continue the practice. Klein explained that even at the trial all experts concluded that it is impossible to look at a single bill and establish overbilling; they must look at the bills as a whole with the use of a spreadsheet.

We talked about cases where the attorney's fees far exceeds the amount in dispute.  Klein asks, "How do you justify that to a client?  There may be some cases were there is a reason to defend the action to the bitter end.  But the client has to go in with eyes open with the understanding that the costs of litigation may be more than the actual dispute."

What did he think about the (possible) death of the billable hour? Klein notes, "Law is the one business that I know of where the less efficient you are, the more money you make.  At least a flat fee encourages efficiency so that you can make a profit.  And the clients know what they will pay at the beginning of the case."

Klein listed several recommendations for lawyers in reviewing their billing policies:

1.  Include "no charge" items rather than overbilling and giving a discount.

2.  Do away at much as possible with entries for "revising" documents.

3.  Don't be the billing attorney if you are not actively involved in the case.

4.  Report extensively to the client and return phone calls.

Klein concludes, "Save your surprises for birthdays and anniversaries.  Clients don't like surprises on their bills."