How do attorneys bill their time
Most attorneys bill their time by recording the work performed, converting that time into billable increments, and multiplying it by an hourly rate. For example, an attorney who bills at $400 per hour and spends 1.5 hours researching and drafting charges $600, before expenses or credits. A May 8 entry might record a separate 1.2-hour document review at the same rate.
The process depends on the fee agreement. Some attorneys use flat fees, contingency fees, retainers, or hybrid arrangements instead of charging for every hour.
How Hourly Attorney Billing Works
An hourly legal bill usually follows this formula:
Billable time × hourly rate = legal fee
A typical time entry includes:
- Date of the work
- Attorney or legal professional who performed it
- Description of the task
- Amount of time recorded
- Hourly rate
- Total charge
For example:
| Date | Work performed | Time | Rate | Charge |
|---|---|---|---|---|
| May 8 | Review client documents and prepare case strategy | 1.2 hours | $400 | $480 |
| May 9 | Telephone conference with opposing counsel | 0.4 hours | $400 | $160 |
| May 10 | Draft and revise motion | 2.5 hours | $400 | $1,000 |
The total legal fee for these entries is $1,640, excluding expenses.
The American Bar Association identifies hourly billing as the most common billing method. Lawyers may charge different rates based on experience, role, and the type of work performed.
What Work Can an Attorney Bill For?
The fee agreement usually identifies which activities are billable. Common examples include:
- Meetings and telephone calls with the client
- Emails about the legal matter
- Legal research
- Drafting contracts, pleadings, letters, and motions
- Reviewing documents
- Negotiating with opposing counsel
- Preparing for depositions, hearings, mediation, or trial
- Attending court proceedings
- Travel and waiting time, if the agreement permits it
- Work performed by associates, paralegals, or legal assistants
A lawyer generally cannot bill for time that was not spent on the client's matter. Billing more time than the work required can create an unreasonable fee or an ethical problem. Lawyers also should not bill two clients for the same period when the work cannot properly be allocated to both matters.
What Are Billing Increments?
Many attorneys record time in set increments rather than minute by minute. Common increments include:
- 0.1 hour: 6 minutes
- 0.2 hour: 12 minutes
- 0.25 hour: 15 minutes
- 0.5 hour: 30 minutes
If an attorney uses six-minute increments, a task lasting two minutes may be recorded as 0.1 hour. A task lasting 14 minutes may be recorded as 0.3 hour.
The written fee agreement should disclose the increment. Larger increments can raise the effective hourly cost when a lawyer performs many short tasks. A California State Bar advisory, for example, warns that quarter-hour billing can produce an unusually high effective rate for multiple brief tasks. State rules and the fee agreement determine whether a particular practice is permitted.
How Retainers Work
A retainer is commonly an advance payment made before or during representation. The term can mean different things, so the fee agreement should explain how the money will be handled.
Advance Deposit or Evergreen Retainer
An attorney may place an advance payment into a client trust account and transfer money from that account as legal fees are earned. The client may then have to replenish the account when the balance falls below a specified amount.
Flat-Fee Payment
A client may pay a set amount for a defined service, such as:
- Preparing a basic will
- Forming a limited liability company
- Handling an uncontested divorce
- Representing a client at a specific hearing
The client pays the agreed amount rather than the attorney's actual number of hours. The fee agreement should state which services are included and what extra work will cost.
General Availability Retainer
A true availability retainer compensates a lawyer for being available to a client, whether or not the lawyer performs a specific task. This arrangement differs from an advance payment for future legal work. Rules concerning advance fees, trust accounts, and refunds vary by jurisdiction.
Other Ways Attorneys Charge Clients
| Billing method | How the attorney is paid | Common uses |
|---|---|---|
| Hourly fee | Client pays for recorded time | Litigation, family law, business disputes |
| Flat fee | Client pays a predetermined amount | Standardized or limited-scope services |
| Contingency fee | Attorney receives an agreed percentage of a recovery | Personal injury and some commercial claims |
| Hybrid fee | Combines methods, such as a reduced hourly rate plus a success fee | Negotiated litigation or business matters |
| Statutory or court-approved fee | Fee is set or reviewed under a statute or court process | Bankruptcy, class actions, fee-shifting cases |
Contingency fee agreements generally must be in writing. They should explain how the percentage is calculated, how expenses are deducted, and what happens if the case settles, goes to trial, or is appealed. Contingency fees are restricted or prohibited in some matters, including certain criminal and domestic-relations cases.
How Legal Expenses Are Added to the Bill
Attorney fees are separate from case expenses. A bill may include costs such as:
- Court filing fees
- Service of process
- Deposition transcripts
- Expert witnesses
- Investigators
- Copying and printing
- Postage and delivery
- Travel
- Electronic research charges
- Mediation or arbitration fees
The fee agreement should state which expenses the client pays and whether the law firm adds an administrative charge or markup. Lawyers must not charge an unreasonable amount for expenses.
Routine law-firm overhead, such as ordinary office rent, basic staffing, and standard equipment, may not always be separately chargeable. Whether a specific cost can be passed to the client depends on the agreement and applicable state law.
What Must the Attorney Disclose?
Under the ABA Model Rules, the lawyer should communicate the scope of representation, the fee basis or rate, and the expenses for which the client will be responsible. This should preferably happen in writing before representation begins or within a reasonable time after it starts. Changes to rates or expenses should also be communicated.
A written fee agreement should answer these questions:
- Is the fee hourly, flat, contingent, or hybrid?
- What hourly rates apply to attorneys, associates, and paralegals?
- What billing increments are used?
- Are emails, calls, travel, and waiting time billable?
- Which expenses will the client pay?
- Is an advance payment required?
- How often will invoices be sent?
- When is payment due?
- What happens if the client disputes the bill or does not pay?
- What work falls outside the original scope?
How Clients Should Review an Attorney's Bill
Check whether:
- The work relates to your legal matter
- The time entries describe actual tasks
- The recorded time appears reasonable
- The agreed hourly rates were used
- Multiple lawyers performed duplicative work
- Expenses are supported and authorized
- The retainer balance and replenishment amount are accurate
- The invoice includes unexplained charges
If an entry is unclear, ask the attorney or billing department promptly. A detailed invoice should make it possible to understand who performed the work, what was done, how long it took, and how the charge was calculated.
If the invoice does not match the fee agreement, raise the issue with the attorney or billing department before the balance becomes harder to resolve.