Client Claims Law Firm Ran Up $90M Legal Bill—Lessons for Clients and Lawyers in Billing Practices

Authors: Laura Salerno Owens, President, and Shareholder

There is a recent case between a social media giant and an AMLAW 100 firm regarding attorney fees, a case that has sent shockwaves through the legal community. While the main focus of the lawsuit is about a “total” fee of $90 million, including a “success fee” (on top of regular fees) of scores of millions of dollars for a few months of work, the complaint attaches the firm’s invoices for 11 weeks of work for approximately $15 million in fees and $2 million in costs. Those invoices show some concerning practices, which can be instructive for both clients (who review bills) and lawyers (who create them):

• Blank billing descriptions. To allow a judge to determine whether work was necessary, the billing description needs adequate detail. Here, shockingly, some entries had no detail. Not redacted, but blank. Multiple lawyers have blank entries multiple times, often for double-digit hours in a single day (e.g., one entry was for 16.92 hours with no description of the work done).

• Vague billing descriptions. Although better than no description at all, a vague billing description can be challenging to support as well. For instance, another lawyer billed 10 hours with a one-word description: “strategy.” Again, this was not an isolated incident.

• Excessive billing. Multiple attorneys recorded more than 400 hours of work in a single month, some even reaching the mid-400s. That's equivalent to billing 14 to 15 hours a day, every day.

• Unclear expenses. $45,855 for “O/S Supplies” as part of over $2.2 million in expenses in one month (including entries for “Kitchen Double-Time”) – while clients can agree to pay such expenses, don’t expect a court to approve them in a fee petition.

As someone who examines law firm invoices, and provides expert testimony to help judges determine whether those bills are appropriate, I would like to share some best practices to support your fee petition:

• Be meticulous in your time entries. Obviously, never leave the description field blank, as it is crucial to provide specific details. Vague descriptions like “strategy” will usually be insufficient. Better practice would be to state “strategy regarding counterclaims” or “strategy regarding non-economic deal terms” so the client (or court) can evaluate whether the task was necessary and the amount of time appropriate.

• Discourage the use of block billing. Many judges believe block billing can inflate the time recorded and reject those entries in fee petitions. Instead, opt for task-based billing, where each task is clearly defined with its specific time allocation.

• Don’t overbill. This last point may sound obvious, but lawyers have an ethical duty to their clients to only charge reasonable and appropriate fees. Savvy clients should be cautious if they receive a bill where multiple timekeepers have billed 400+ hours in a month with very little to describe what was achieved for those legal fees. Attorneys should also maintain clear and comprehensive documentation. Well-organized records that accurately reflect the work performed will bolster your fee petition.

Presenting a transparent and well-substantiated fee petition can significantly increase your chances of a favorable outcome in court in a fee dispute case. And, more importantly, clear time entries will show your client that they are receiving value for their legal fees.

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