The US overbilling scandal: Why we should not be so shocked
The former Kirkland lawyer's deeds clearly won't earn him an ethics award, but did he do anything that outrageous?
January 24, 2019 at 03:57 PM
4 minute read
The original version of this story was published on The American Lawyer
Maybe it's because I was never a Girl Scout. Or maybe it's because I'm just jaded. For whatever reason, I can't sum up the outrage that some members of the profession are expressing over the lawyer who padded his billables.
In case you've missed it, here's the scandal that's rocking the legal world: Chicago lawyer Christopher Anderson confessed to overbilling clients for several years – first, at Kirkland & Ellis (where he was an associate), then at Neal Gerber & Eisenberg (where he made partner before getting booted for the overbilling). He now faces discipline from the bar.
The lawyer discipline complaint filed by the Illinois bar says that Anderson inflated his time "in an attempt to meet what he perceived to be the firms' billing expectations". As an example, the complaint says that if Anderson "spent 0.3 hours on a client matter, he would record that he had actually spent 0.5 hours, or he would bill 2.1 hours for work that actually took him 1.7 hours to complete".
OK, I know what Anderson did won't earn him a Scouts merit badge, but did he do anything that shocking and outrageous?
I don't think so, but it appears I'm in the minority. New York University School of Law ethics guru Stephen Gillers and legal consultant Janet Stanton both told my colleague Dan Packel that it's "rare" that lawyers inflate their billable time – at least intentionally.
To me, that raises the question of what "intentional" means. In my experience, every firm seems to harbour a few lawyers who are known as "aggressive" billers – and everyone knows it. In fact, partners often encourage associates to take a broad definition of billable time. As one partner said to me when I was an associate: "If you're thinking billable thoughts, bill them! I don't care if you're in the office or the shower!"
Right or wrong, there's a sense that padding billables is a victimless crime – particularly if you're working for a fat-cat client on a big transaction where lawyer fees seem like peanuts compared to what the business folks are pocketing. Perhaps we'd feel differently if the client was a widow or orphan.
You really have to wonder what would happen if every lawyer's time got scrutinised. My guess: The disciplinary committees of state bars would be very busy.
In any case, it's difficult to say how often billable-hour inflation occurs. "It's an empirical question with a complete inability to collect data," says William Henderson, professor at Indiana University Maurer School of Law. "Many commentators say it does, as do some lawyers privately."
That said, Henderson insists that what Anderson did was plain wrong. "I don't think this is a case of simple rounding up," adding that bumping "1.7 to 2.1 [hours] is not rounding; it is inflating." He also points out that Anderson told The American Lawyer: "This is just an attempt by me to make my life right. It's not been easy for me along the way, but I feel like I've done the right thing."
Henderson calls this "a confession that flows from a guilty mind".
Which leads me to the most intriguing question in this episode: Why did Anderson decide to out himself? (I called Anderson, but he politely declined to comment.)
I don't think he admitted his misdeeds because he was on the verge of being discovered. Indeed, Neal Gerber's managing partner Scott Fisher told The American Lawyer: "The investigation further found that, had our firm been subjected to an outside audit of its billing records, Anderson's time would not have drawn attention." In other words, Anderson seems to have been a very subtle overbiller.
As for repercussions, Fisher tells me the firm is weathering things quite well: "The response from our clients has been incredibly positive, heartening and reaffirming of our approach. Indeed, several clients commented that our swift response to this abhorrent behavior strengthened their trust in our firm." (The firm has offered to refund clients a total of $150,000 for Anderson's overbilling.)
Still, I wonder if everyone wishes Anderson never opened up this whole can of worms.
Contact Vivia Chen at [email protected]. On Twitter: @lawcareerist.
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