2015 NJSBA Annual Meeting Law Office Management Track Billing Fundamentals: The Rules, Ethical Considerations and Practicalities of Billing Your Clients Speakers: Anthony M. Carlino, Esq., Member, NJ Supreme Ct Commitee on the

Unauthorized Practice of Law McElroy Deutsch Mulvaney & Carpenter, LLP (Ridgewood) Rick Kabra, PhD, CEO CosmoLex Florina A. Moldovan, Esq. McElroy Deutsch Mulvaney & Carpenter, LLP (Ridgewood)

Billing Fundamentals: The Rules, Ethical Considerations and Practicalities of Billing

Your Clients 2015

McElroy, Deutsch, Mulvaney & Carpenter, LLP

Presenters: Anthony M. Carlino, Esq. Florina A. Moldovan, Esq.

©McElroy, Deutsch, Mulvaney & Carpenter, LLP 2015 All Rights Reserved

IMPORTANCE OF EFFECTIVE BILLING

• Inevitable part of law practice - tracking and billing time to clients

• Approved bills assure a steady and timely flow of income to the firm

• No bills, no invoices, no payments • Timekeeping vital to the firm’s success and

the individual attorneys’ success

IMPORTANCE OF EFFECTIVE BILLING

• Clients are cost-conscious and tech-savvy • Bills are examined closely via database

applications to sort and analyze billing data • E-billing subjects invoices to increased

scrutiny, negotiation and dispute • Our goal - create prompt, accurate and

precise time entries

THE RULES • Rules of Professional Conduct regulate fees

and fee arrangements • ABA RPC 1.5 and NJ RPC 1.5 - fee charged

must be reasonable for the services performed, based upon the factors set forth in the rules

• Check your state RPCs

ABA Rule 1.5: Fees

(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for

expenses. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill

requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will

preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. (b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be

responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.

ABA Rule 1.5: Fees (cont) (c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter

in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

(d) A lawyer shall not enter into an arrangement for, charge, or collect: (1) any fee in a domestic relations matter, the payment or amount of which is contingent upon

the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof; or

(2) a contingent fee for representing a defendant in a criminal case. (e) A division of a fee between lawyers who are not in the same firm may be made only if: (1) the division is in proportion to the services performed by each lawyer or each lawyer assumes

joint responsibility for the representation; (2) the client agrees to the arrangement, including the share each lawyer will receive, and the

agreement is confirmed in writing; and (3) the total fee is reasonable.

NJ RPC 1.5 Fees (a) A lawyer’s fee shall be reasonable. The factors to be considered in determining the reasonableness of a

fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill

requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will

preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; (8) whether the fee is fixed or contingent. (b) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be

communicated in writing to the client before or within a reasonable time after commencing the representation.

NJ RPC 1.5 Fees (cont) (c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in

which a contingent fee is prohibited by law or by these rules. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

(d) A lawyer shall not enter into an arrangement for, charge, or collect: (1) any fee in a domestic relations matter, the payment or amount of which is contingent upon

the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof; or

(2) a contingent fee for representing a defendant in a criminal case. (e) Except as otherwise provided by the Court Rules, a division of fee between lawyers who are not in the same

firm may be made only if: (1) the division is in proportion to the services performed by each lawyer, or, by written agreement

with the client, each lawyer assumes joint responsibility for the representation; and (2) the client is notified of the fee division; and (3) the client consents to the participation of all the lawyers involved; and (4) the total fee is reasonable.

FEE AGREEMENTS

• Billing should comply with terms of fee agreements

• Every fee agreement must include: a) Identity of the client (i.e., entity, individual

officers, board or joint representation); b) Scope of representation (i.e., broad or

specific); and c) The fees and costs.

YOUR AUDIENCE: Other Lawyers In The Firm

• The firm’s partners and billing attorneys. The exact nature of your activities as a professional within the firm should be reflected in the descriptions in your time entries.

• Sufficiently detailed to apprise of the nature of your billable

activities on the client files. • Poor or unintelligible time records cost the firm’s billing

attorneys and accounting staff time, trouble and expense. • Strive to insure your time entries are accurate, understandable

and sufficiently descriptive of your activities.

Your Audience: The Client • Billing statements are marketing opportunity for the

firm. Clients appreciate your efforts and have greater comfort and ease in paying the bills.

• Billing statements are the records that justify our

professional fees and costs to clients. • Billing statements are the firm’s best opportunity to

“make your case” to the client to use the firm.

• Incorrect/insufficient descriptions confuse clients, reduce the likelihood of payment, strain client relations.

Your Audience: Opposing Counsel and Judges

• Billing statements reviewed and scrutinized by a judge or opposing counsel when there are fee applications

• Failure to keep good time records - grounds for reducing or refusing an award of attorneys’ fees to client [while detail may need to be redacted in a fee award application to preserve the firm’s confidential communications with clients that does not mean that the initial entry should be minimal]

Your Audience: Fee Arbitration Panels

RULE 1:20A District Fee Arbitration Committees • If a dispute arises, billing statements and practices are

reviewed by the Fee Arbitration Committee (NJ). Time records should justify and explain the firm’s professional fees and charges as proper and appropriate.

• Proper time entries/records are the best defense to a

complaint about the propriety and reasonableness of fees and best evidence why attorneys’ fees should be awarded in fee dispute with a client.

GENERAL PRINCIPLES TO ACTUALLY GET PAID

• Satisfy fee agreement and communicate effectively with client

• Learn client billing policies • Bill often and regularly • Use complete sentences and proofread • Do not use “the client” when referring to

individuals in client’s company

GENERAL PRINCIPLES

• Do not block bill or use excessive minimum units

• Keep track of all time - even on contingent matters

• Bill to the correct client/matter numbers • Use detailed billing narratives • Record time promptly • Reflect behind the scene activities in bills

FIVE TECHNIQUES FOR BETTER BILLING

1. LEARN THE RULES

• Billing Guidelines

• Billing Codes

• Frequency of Billing

2. PLAY BY THE RULES

• Comply with the Guidelines • Reviewer may not know you or the file • Reviewer may not know the quality or

quantity of work • Make the reviewer happy

3. ANALYZE AND EVALUATE

• Show nature of work requires a lawyer’s skill and analysis

– Don’t say summarize – Don’t say organize – Don’t say schedule

3. ANALYZE AND EVALUATE

• Show why telephone conference requires lawyer

– Don’t say t/c with expert re: dep – Do say t/c with expert re: timing of

deposition and nature of testimony to be provided

• If the task is clerical, delegate it

EXAMPLES – Don’t say review letter re: dep. of plaintiff – Do say analyze letter from plaintiff re: scope and

timing of dep. of plaintiff – Don’t say summarize plaintiff’s interrogatory

answers – Do say analyze plaintiff’s interrogatory answers re:

facts of accident, nature of plaintiff’s injuries and basis of liability

4. JUSTIFY THE TIME

• Examiners looking to cut time • Over-describe lengthy tasks • Emphasize length of submission prepared

or reviewed

• Get authority for lengthy or extensive work • Break down pieces of long project into

subparts

EXAMPLES – Don’t say prepare answers to plaintiffs’ rogs

(4.2) – Do say prepare answers to plaintiffs’ 62

interrogatories re: facts of accident, clients’ involvement in project and liability defenses

EXAMPLES – Don’t say work on S/J brief (7.2) – Do say work on section of S/J brief on

standard of review (.7); work on section of brief on no causation (2.2); work on detailed statement of facts section of brief (3.2); work on section of brief on no premises liability (1.1)

5. DO YOUR TIMESHEETS DAILY

• Do them contemporaneously • If you wait, you lose needed specificity and time is

lost • Client may not accept old entries or disbursements on

later bills

• Burden on secretaries and accounting

• Enter them legibly if not self entered

Ethical Concerns for Late Time Entry

• Cannot guarantee certainty of billable hours

without prompt entry of time into system • System records date when time is entered • Fiduciary duty owed to client mandates timely

billing entries

PROBLEM AREAS • Disbursements

– Justify overnight and hand deliveries on pre-bill

• Computer research – if approval needed, get it – if on-line time not paid, use other sources

• Office Conferences

Proposals for Improvements • Compile list of all actions/tasks performed for

each • Compile standard language for each task

performed • Review current billing guidelines

– type of work performed by type of personnel – expenses – what is billable and what is not – new timekeepers

• Discuss most common reasons for rejection notices

Results • Easier pre-billing review processes • Fewer questions relating to ethics issues

involving billing • Elimination of “key-word hits” words by

electronics reviewers • Reduction or elimination of rejection

notices • Reduction of write-offs

Hypothetical Billing A Comparison of Time Entries

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 9/1/12 Call from client

• 9/1/12 Call from J. Smith re. B. Jones’ commencement of employment with competitor and ABC Co.’s desire to enforce covenant not to compete

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 9/2/12 Review documents

• 9/2/12 Review documents provided by J. Smith re. unfair competition claim including B. Jones’ employment agreement with covenant not to compete, personnel file with performance evaluations, job description and responsibilities, customer lists and other confidential information to which B. Jones had access during employment, resignation letter, company's response

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 9/4/12 Legal research re. various issues

• 9/4/12 Research per authorization of J. Smith re. enforceability of covenant not to compete, permissible breadth, duration and geographic scope, common law proscriptions of unfair competition by ex-employees, showing necessary to obtain preliminary injunctive relief

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 9/5/12 Phone calls with client reps; draft complaint

• 9/5/12 Telephone conferences with J. Doe (supervisor) (.6), R. Roe (co-employee) (.5), and B. Boe (HR director) (1.1) re. factual background / pre-resignation activities; draft verified complaint with eight counts seeking injunctive relief and damages (4.2)

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

9/6/12 Draft brief

• 9/6/12 Draft three-point brief in support of order to show cause re. (1) enforceability of restrictive covenant (2) common law of unfair competition (3) elements of claim for preliminary injunctive relief

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 9/7/12 E-mail to client; phone call with client; draft papers for injunction

• 9/7/12 Draft e-mail to J. Smith re. draft brief (.2) confer with J. Smith re. same (.6) continued preparation of brief including shepardizing caselaw and incorporating J. Smith’s comments (1.5), verified complaint (.4) order to show cause (1.2) letter to court re. same (.2)

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 9/8/12 Calls with court, client; prepare for hearing

• 9/8/12 Call from Judge Johnson re. application for injunctive relief / hearing (.2) telephone call to J. Smith re. same (.3) prepare for hearing including outline of argument and responses to anticipated questions from court (1.5)

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 9/9/12 Attend hearing; call client

• 9/9/12 Travel to (1.4) and participate in hearing (2.1) before Judge Johnson; telephone call to J. Smith re. outcome (.4).

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 10/6/12 Prepare for trial

• 10/6/12 Prepare for trial per authorization of J. Smith including outline of opening statement, preparation of outline for cross-examination of plaintiff, analysis of exhibits to be used during cross-examination

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 11/10/12 Prepare for deposition

• 11/10/12 Prepare for deposition of plaintiff including review of answers to interrogatories, medical records regarding prior accidents / injuries, statements of witnesses, and identification of conflicts between foregoing and allegations of complaint

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 12/9/12 Draft interrogatories to plaintiff

• 12/9/12 Draft interrogatories to plaintiff including questions probing factual basis for allegation that co-workers received higher compensation and more favorable treatment, seeking details regarding offensive statements allegedly made by supervisor and requesting basis for contention that supervisor and company's actions gender-based

Ask yourself which time entry you would be inclined to pay without inquiry or objection.

• 8/30/12 Draft status report

• 8/30/12 Draft detailed report to J. Jones regarding outstanding discovery, progress on research regarding existence of duty, advisability of alternative dispute resolution, preliminary evaluation of liability and damage issues, strategy

Anthony M. Carlino - Attorneys - McElroy, Deutsch, Mulvaney & Carpenter, LLP

http://www.mdmc-law.com/attorneys/Anthony_Carlino/[4/30/2015 4:30:00 PM]

Attorneys

CURRICULUM VITAE AWARDS & RECOGNITIONS APPOINTMENTS & MEMBERSHIPS

©2015 McELROY, DEUTSCH, MULVANEY & CARPENTER, LLPDISCLAIMER INTRANET SITE BY INHERENT, INC.

HOME ATTORNEYS ANTHONY M. CARLINO

IndustriesAUTOMOTIVE

INSURANCE

Practice AreasINSURANCE SERVICES

LITIGATION

PREMISES LIABILITY

PRODUCT LIABILITY

PROFESSIONAL LIABILITY

EducationSeton Hall Law School (J.D. 1980)

Montclair State University (B.S.1977)

AdmissionsState of Colorado

State of New Jersey

State of New York

Supreme Court of The UnitedStates

U.S. Court of Appeals, 3rd Circuit

U.S. Court of Appeals, FederalCircuit

U.S. District Court, District of NJ

OFFICE: RIDGEWOOD

201-493-3701

201-445-5376

ACARLINO@MDMC-LAW.COM

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Anthony M. Carlino - Partner

ANTHONY M. CARLINO is a graduate of Montclair State College,(B.A., 1977); Seton Hall University School of Law, (J.D., 1980). Heserved a Judicial Clerkship for The Honorable Fred C. Galda,A.A.J.S.C., 1980-1981. Admitted to the New Jersey Bar, 1980; to theNew York and Colorado Bars, 1989; United States District Court,District of New Jersey, 1980; United States Supreme Court, 1985;United States Court of Appeals Third Circuit, 1985; and United StatesCourt of Appeals for the Federal Circuit, 1985. Assistant BergenCounty Prosecutor, (1981-1982); McElroy, Deutsch, Mulvaney &Carpenter, LLP; and Managing Partner, Ridgewood, New Jersey Office.Member, American Bar Association; New Jersey State Bar Association,Member Board of Trustees (2012-); Bergen County Bar Association,Member Board of Trustees (1995-2011), President, 2009-2010.Appointed by the Supreme Court of New Jersey to serve on theSupreme Court’s District Fee Arbitration Committee. Appointed by theNew Jersey Supreme Court to serve on the Supreme Court Committeeon the Unauthorized Practice of Law. Appointed by the Supreme Courtof New Jersey to serve on the Supreme Court’s Ad Hoc Committee onLaw Firm Trade Names.

Mr. Carlino has an extensive background in the defense of litigatedmatters including but not limited to commercial litigation, professionalliability, product liability/defect, breach of warranty claims,automotive and marine claims and insurance coverage claims. Herepresents, among other clients, New Jersey Manufacturers InsuranceCompany, United Rentals, Inc., Gerber Life Insurance Company, OldRepublic National Title Insurance Group, EastAir Corporation, SeaPearl Inc., Bergen County Ribbon Xchange, Med-X International,Topcon Corporation, Maserati North America and Ferrari NorthAmerica.

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Rick Kabra, PhD, CosmoLex

As an industry leader in legal practice management software, CosmoLex holds to a singular mission: To apply cloud technology to law office operations in ways that enable better bottom lines for law firms – and better quality deliverables for their clients.

In 2012, our founding visionary, Rick Kabra, Ph.D. — having already spent eight years developing desktop software for lawyers — realized that the time had come to bring the advantages of “the Cloud” to law offices. At that time, most major industries started moving much of their infrastructure to the Cloud. Rick could clearly see how “cloud computing” offered unique advantages to law firms — especially small-to-midsized firms that simply could not afford to spend more and more on in-house technology and administrative expenses every year.

So in 2013, Rick began building CosmoLex — a fresh approach, designed from the ground up for the sole purpose of serving the operational needs of small law firms with state-of-the-art, Cloud-based software.

Today, CosmoLex Cloud is redefining the daily work life of hundreds of law firms across the country. And that’s important to us, because our business is all about service – meeting the real needs of law firms – technology is just the tool.

CosmoLex is much more than a “practice management” tool. Our clients rely on CosmoLex as their fully functioning, virtual law office – that lives in the Cloud. CosmoLex’s comprehensive menu of capabilities has replaced the hodgepodge of separate programs and manual clerical work that used to be the norm at law firms. Rick’s vision of offering a “Total Law Practice Solution” — a platform upon which lawyers can manage & run an entire practice is becoming a reality with each passing day.

As the practice of law continues to change, as the pace accelerates and the demands increase, CosmoLex will continue to grow and meet those needs. We invite you to join us on this journey!

Florina A. Moldovan - Attorneys - McElroy, Deutsch, Mulvaney & Carpenter, LLP

http://www.mdmc-law.com/attorneys/Florina_Moldovan/[4/30/2015 4:30:28 PM]

Attorneys

CURRICULUM VITAE PUBLICATIONS APPOINTMENTS & MEMBERSHIPS

©2015 McELROY, DEUTSCH, MULVANEY & CARPENTER, LLPDISCLAIMER INTRANET SITE BY INHERENT, INC.

HOME ATTORNEYS FLORINA A. MOLDOVAN

IndustriesCORPORATE

REAL ESTATE

Practice AreasCORPORATE TRANSACTIONS

INTELLECTUAL PROPERTY

INTERNATIONALARBITRATION

LABOR & EMPLOYMENT

LITIGATION

EducationSeton Hall Law School (J.D.magna cum laude, 1991)

Colorado State University (B.S.cum laude, 1981)

AdmissionsState of New Jersey

Supreme Court of The UnitedStates

U.S. Court of Appeals, 3rd Circuit

U.S. District Court, District of NJ

OFFICE: MORRISTOWN

973-425-8844

973-425-0161

FMOLDOVAN@MDMC-LAW.COM

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Florina A. Moldovan - Partner

FLORINA A. MOLDOVAN practices primarily in the areas ofcomplex commercial litigation, employment litigation and advice,business disputes and intellectual property matters. She represents abroad range of business clients in trade secret, noncompetition,trademark, copyright, and Internet-related disputes, including ICANNproceedings. Ms. Moldovan also participates in the professionaldevelopment and training programs of the firm, and in the firm’slitigation support and technology efforts, specializing in e-discovery.

Ms. Moldovan is a 1981 graduate of Colorado State University, cumlaude, and 1991 graduate of Seton Hall University School of Law,magna cum laude, where she served as member and Associate Editorof the Law Review. She was admitted to the bars of New Jersey and theUnited States District Court, District of New Jersey in 1991, theSupreme Court of the United States in 2001, and the United StatesCourt of Appeals for the Third Circuit in 2005. She is a member of theNew Jersey State Bar Association, including its Internet and ComputerLaw Committee and Business and Commercial Litigation Committee;the American Bar Association; and The Society for Human ResourceManagement. Ms. Moldovan’s article, “Tag You’re it: Metatags – CraftyMarketing Strategy or Violation of Trademark Law?,” was published inthe December 2008 issue of the New Jersey Lawyer Magazine.

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