Overbilling But Not Dishonestly

An Illinois Hearing Board found that a court-appointed attorney overbilled for services but not dishonestly and recommended a partially-stayed six-month suspension

This case is unusual in that the Administrator does not claim that Respondent charged an hourly rate that was too high, inadequately served his clients, or failed to perform the tasks itemized on his fee petitions. Rather, the Administrator alleged that Respondent unreasonably billed too many hours for the work he actually performed. Courts have addressed this issue when deciding whether to approve fee petitions. To determine a reasonable hourly-billed fee, courts begin by multiplying the reasonable hourly rate by the reasonable amount of time spent. Casey v. Rides Unlimited Chicago, Inc., 2022 IL App (3d) 210404, ¶¶ 9-12, 232 N.E.3d 36. However, “[t]he total hours as shown by attorneys’ records should not be considered conclusive. A court in fixing the attorneys’ compensation must also consider the necessity for and the quality of the time spent. Wasted time or needless duplications cannot be used to enhance the fees.” Leader v. Cullerton, 62 Ill. 2d 483, 491, 343 N.E.2d 897 (1976). Courts should deduct unreasonable hours when calculating a total reasonable fee. See also In re Estate of Halas, 159 Ill. App. 3d 818, 832-33, 512 N.E.2d 1276 (1st Dist. 1987). These concepts apply to attorney disciplinary matters, as Rule 1.5(a) recognizes “the time and labor required” as one of the factors to consider in determining whether an attorney charged an unreasonable fee. Ill. R. Prof’l Cond. R. 1.5(a)(1).

The Administrator argued that it was impossible for one attorney to have actually worked over 4,400 billable hours in a year and that Respondent reached this unreasonable total through his improper use of minimum billing increments. Some federal courts have found billing in a minimum one-hour increment to be unreasonable when the time billed exceeded the time actually spent. Nichols v. Illinois DOT, No. 12-cv-1789, 2019 U.S. Dist. LEXIS 4633, at **28-30 (N.D.
Ill. Jan. 10, 2019) (“blatantly inappropriate” to bill one hour for brief court appearances, such as telephonic status hearings, that did not last an hour); In re Adventist Living Centers, Inc., 137 B.R. 692, 699 (Bankr. N.D. Ill. 1991) (unacceptable to bill in one-hour increments in contravention of court’s preference for one-tenth hour increments).

Other federal courts have found nothing inherently wrong with a firm’s normal practice of billing in quarter-hour increments. Garcia v. R.J.B. Properties, 756 F. Supp. 2d 911, 918-19 (N.D. Ill. 2010); Herrejon v. Appetizers &, Inc., 97 C 5149, 1999 U.S. Dist. LEXIS 2550, at **9-10 (N.D. Ill. Feb. 19, 1999). An Illinois appellate court agreed that this practice was not unreasonable in principle but rather may become unreasonable in application, noting, “the larger the minimum
billing increment, the greater the likelihood that overbilling will occur.” In re Marriage of Andres, 2021 IL App (2d) 191146, ¶¶ 80-81, 196 N.E.3d 430. The Andres court found that the attorneys’ practice of rounding up and down to the closest quarter-hour and not billing for brief email responses resulted in an acceptable balancing of overbilled and underbilled time. Id. at pars. 81-82.

Accordingly, in the present case, we find that Respondent’s Rule 1.5(a) violation stems not from his use of minimum billing increments in general but rather from the way in which he applied them. We consider whether there were any applicable court policies affecting Respondent’s use of such increments and whether Respondent’s overall billing practices resulted in reasonable fees charged between April 2021 and March 2022.

Finding

In summary, Respondent’s testimony about his billing practices and the extraordinarily high number of billed hours during the 12 months at issue demonstrate that he overrepresented his hours worked as a court-appointed attorney and thus overcharged his fees. We find that the Administrator proved by clear and convincing evidence that Respondent violated Rule 1.5(a).

No dishonesty

We find that Respondent’s excessive billed hours were the product of several factors, none of which involve dishonesty. First, Respondent used a rudimentary system to track his billable hours. This system involved making individual time entries in individual client files, with no method for aggregating hours by the day, week, or year across all of his files. Second, Respondent was a sole practitioner who had no partner, associate, or administrative assistant who might have
suggested or supported a better timekeeping system. Third, as discussed in the Rule 1.5(a) analysis, Respondent used minimum billing increments that were commonly accepted in the Child Protection Division, although he erroneously applied them in a way that resulted in overbilling. Fourth, Respondent relied on the decades-long acceptance of his fee petitions by the judges and attorneys in the Child Protection Division as a stamp of approval of his billing practices, so he did not question those practices. Fifth, until the Chief Judge’s Office looked at Respondent’s numbers in the aggregate, no one in the court system was aware of the scope of his excessive billing, which occurred across 275 fee petitions that were reviewed by 12 different judges and numerous assistant state’s attorneys over the course of a year.

For all of these reasons, we find credible Respondent’s testimony that he, too, was unaware of his overbilling until he was confronted with the data in October 2022. The Administrator attempted to prove fraudulent conduct by asking Respondent how he could have managed to work so many extraordinarily long days, often in a row, with such little sleep. But this approach assumed that Respondent actually worked all of the hours that he billed, which we have found that he did not do.

Sanction

Based on the proven misconduct, aggravation, and mitigation, the Hearing Board recommends that Respondent be suspended for six months, with the suspension stayed after 90 days by a six-month period of probation with conditions designed to improve his timekeeping and billing practices.

In mitigation, Respondent has practiced for over 51 years without prior discipline, and several judges and attorneys testified to his excellent reputation for honesty and for being among the best lawyers in the Child Protection Division. This reputation, along with the decrease in available court-appointed attorneys during the pandemic, led to the massive growth of his caseload during the time period at issue. Respondent expressed remorse for his “stupid” pride that he could handle so many cases at once. Although he overstated the number of hours he worked on those cases, there was no allegation that he inadequately served any of his clients. His rudimentary timekeeping system and lack of support staff contributed to his overbilling. Additionally, Respondent has a history of volunteer service through the Chicago Bar Association and was cooperative throughout this proceeding.

In aggravation, Respondent’s overbilling occurred over the course of a year and across 275 fee petitions, which evidences a pattern of conduct. We found that he did not have actual knowledge of the total hours he was billing at that time, but such a highly experienced attorney should have recognized the need to have a system in place that enabled him to identify and take corrective action on billing issues such as excessive hours billed in a given period. Even if we
assume that Respondent was regularly working more than the standard 40 hours per week, based on his credible testimony that he frequently worked into the night and on weekends, we still find that there was a substantial gap between how much he actually worked and the incredible number of hours he billed, resulting in a significant amount of overcharged fees. Additionally, Respondent’s misconduct caused numerous court staff and judges to unnecessarily expend time addressing his overbilling and caused the delay of a child protection trial after Respondent was removed from that matter.

(Mike Frisch)