DOs AND DON’Ts OF BILLING
OR
HOW TO GET PAID, STAY PAID, AND REMAIN LICENSED
ANDREW D. WEISBLATT
THE WEISBLATT LAW FIRM, L.L.C.
1800 St. James Place, Suite 105
Houston, Texas 77056
713-666-1981
E-Mail: adw@weisblattlaw.com
www.weisblattlaw.com
HOUSTON BAR ASSOCIATION
2015 NEW LICENSEE INSTITUTE
June 5, 2015
Houston
This paper has two main sections:
• The Mechanics:
• Engagement Letters
• IOLTA Accounts
• The Anecdotes:
• The Dos
• The Don’ts
Always have a written engagement letter!
• DO:
•
•
•
•
• DON’T
Identify your client
Identify the scope of the project
Identify potential conflicts
Describe the deal points:
•
•
•
•
•
Hourly v. Contingent
Hourly Rate
Contingency %
Billing Increment
Minimum deposit
• State Bar Disclosures
• Charge impermissible contingent
fees such as:
• Criminal Cases
• Inappropriate domestic cases
• Confuse “retainers” and “deposits
against fees and/or expenses”
• Charge impermissible flat fees
(more on this later)
• Charge fees that violate the law or
are unconscionable.
IOLTA accounts (Page 1 of 3)
Part 1 – putting money IN.
• Your IOLTA account is your friend!
• IOLTA stands for Interest on Lawyer’s Trust Accounts. The interest on these
accounts goes to fund State Bar programs for providing legal services to
indigent persons.
• You can establish special “single client” non-IOLTA trust accounts if you
anticipate holding very large amounts of other people’s money for long
periods of time.
• It’s hard to get into trouble for putting money into an IOLTA account, but
easy to get in trouble for putting money into your operating account. – DO
NOT COMINGLE YOUR FUNDS AND OTHER’S FUNDS!
• Credit Cards and credit card fees.
IOLTA accounts (Page 2 of 3)
Part 1 – Taking money out – the fun part!
• You can remove funds from the IOLTA account that are earned.
• Special issues with “retainers” and “flat fees.”
• See Cluck v. Comm’n for Lawyer Discipline; 247 S.W.3d 434 (Tex.App.-Dallas 2008, pet.
denied) - The “non-refundable retainer” case.
• Ethics Opinion 611 – “non-refundable retainer which includes services opinion.
• Settlement Statements are cheap insurance!
• Payments that are partially A/R and partially unearned – IOLTA ONLY!
• Never remove disputed funds! Joe Marr Wilson v. Comm’n for Lawyer
Discipline; BODA Case. No. 46432; (January 28, 2011). – Money deposited
for non-fee purpose used for fees.
• How “available funds” versus “collected funds” can ruin your life.
IOLTA accounts (Page 3 of 3)
Part 3 – Accounting and Compliance
• Everyone who has an IOLTA account must provide an annual report to
the State Bar of Texas.
• TRDP 15.10 – 5 year record retention requirement!
• Abandoned Funds – Ethics Opinion 602 or “It’s STILL not your money,
dang it!”
Careful of Conflicts – they do exist
• Conflicts are not hypothetical law school constructs.
• Conflicts can keep you from being paid!
• Ethics Opinion 500
• Can you represent two passengers in a car crash case?
• What if one of the passengers has bruises and the other becomes a paraplegic – and there’s only a minimal
policy limits?
• Whenever there is a potential conflict, please re-read TDRPC 1.06-108.
• If there is an actual or potential conflict which is waivable, and you determine to represent
multiple clients, get the waiver in writing which explains not only the conflict, but also the
importance of the waiver and what happens if the conflict becomes such that continued
representation of the multiple parties is not possible.
• If your clients are feuding over division of settlement funds – you cannot disburse these
funds. It is also risky to try to act as “mediator” between the clients. It is best to
anticipate these potential problems in your engagement letter. If this situation arises,
you may have to withdraw and let the clients resolve it through legal or other means. In
the meantime, you cannot disburse funds (unless all clients agree in writing to the
disbursement).
Tips to increase the likelihood of payment
• Require an adequate deposit against fees and expenses – if they can’t pay you NOW they wont be
able to pay you LATER!
• Ask for what you’re worth. Assess your hourly rate at least yearly.
• Bill ALL of your time. Clients like to see “no charge” items on the invoices. Even if you do a two
minute task – “Called and left message for opposing counsel” – best practice is to bill the time
and then “no charge” it on your invoice.
• Draft detailed time entries. Which would you rather pay:
• Research, emails with co-counsel, opposing counsel and client, check State incorporation records – 1.75
hours.
• OR
• Online legal research regarding opposed motions for entry upon and inspection of real estate under Rule
196.7; draft and revise email to ADW re same. Review email from ADW re XXXX’s conversation. Review followup email from client reacting to same. Draft and revise extensive email to client regarding issues relating to
effective date of proposed partnership dissolution and YYYY’s likely positions re same; confirm current status
of limited partnership registration with Texas Secretary of State's office online. – 1.75 hours.
• Clients hate surprises. Keep them informed. Bill twice a month in very active months.
Tips to increase the likelihood of payment
Page 2
• Take credit cards – but be careful of the IOLTA issues.
• Consider a credit card “backup.” Ethics Opinion 582
• Withdraw early and often.
• Decide in advance which clients are pro-bono. Remember – “No
good deed goes unpunished.”
Some notes on “expenses.”
• You may only charge the client more than the amount of expense you
pay after disclosure and agreement.
• In some cases, this rule applies to “contract lawyers!” See Ethics Opinion 577.
• Trying to track expenses can be an unproductive. Evaluate it carefully.
• Really…I mean, really?
• Don’t charge clients for gifts that you buy other lawyers in your firm.
• Don’t expense lavish meals.
• Don’t expense anything that you wouldn’t want to explain to a judge in open
court.
Final thoughts….
• Your invoices are written to many audiences:
•
•
•
•
Client
Judge and/or Jury of the dispute
Judge and/or Jury of the malpractice claim against you.
Disciplinary board
• It’s better to not do the work and not get paid than to do the work
and not get paid. (Foonberg – How to Start and Build a Law Office)
• Invoices are one of the few documents which your clients will actually
read – make sure they say things you want them to see.
• People want effort almost as much as results.