Unit 6: Legal Fees, Timekeeping, and Billing Chapter 5 Practical Law Office Management, 3 rd Edition, Thomson Delmar Learning ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED.

2 Academic Honesty Kaplan University considers academic honesty to be one of its highest values. Students are expected to be the sole authors of their work. Use of another person’s work or ideas must be accompanied by specific citations and references. Though not a comprehensive or exhaustive list, the following are some examples of dishonesty or unethical and unprofessional behavior:  Plagiarism: Using another person’s words, ideas, or results without giving proper credit to that person; giving the impression that it is the student’s own work  Any form of cheating on examinations  Altering academic or clinical records  Falsifying information for any assignments  Submitting an assignment(s) that was partially or wholly completed by another student  Copying work or written text from a student, the Internet, or any document without giving due credit to the source of the information  Submitting an assignment(s) for more than one class without enhancing and refining the assignment, and without first receiving instructor permission. (In cases where previous assignments are allowed to be submitted for another class, it is the responsibility of the student to enhance the assignment with additional research and to also submit the original assignment for comparison purposes.)  Assisting another student with reasonable knowledge that the other student intends to commit any act of academic dishonesty. (This offence would include, but not be limited to, providing an assignment to another student to submit as his or her own work or allowing another student to copy answers to any test, examination, or assignment.)

3 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Academic Honesty What is plagiarism? Plagiarism refers to academic dishonesty that can be intentional or unintentional. This can be the result of attempting to recycle your own work from another course or semester, inaccurately citing the work of someone else, failing to give credit to someone else for his or her ideas or writing, failing to summarize or paraphrase a quote in your own words, or anything else that falsely represents any part of your work.

4 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Academic Honesty What is the difference between accidental and intentional plagiarism? Accidental plagiarism is the result of improperly using or inaccurately citing a source, while intentional plagiarism is outright dishonesty. However, plagiarism in any form is still plagiarism, and the consequences are the same whether or not it was intended. “I didn’t know that was considered plagiarism” is not a defense.

5 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Academic Honesty Charges of academic dishonesty brought against a student shall be made in writing by the instructor to the Provost's Office. When an offense has been committed, the Provost's Office sends the student a copy of the plagiarism policy and a letter of the action taken, and informs the Academic Department Chair, the Academic Advisor (online)/Academic Dean (onsite), and the course instructor of any plagiarism charges. The Provost's Office maintains a database of plagiarism offenses and a file of all plagiarism charges.

6 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Unit 7 Written Assignment The Unit 7 written assignment design an office space for the attorney described in the fact set used for the midterm essays. Note that only your prose description of the space is to be submitted: Write a complete prose description of the law office. You should write this description as if you were explaining the layout of the law office to an architect who will draw your plans. The drawing you prepare is for your use and to help you to set up the office. It is not to be submitted. You will be graded on the prose description you prepare. One of the key factors in your grade will be your ability to make the reader understand your intentions in the design of the office. You will also be graded on the basis of your ability to create an ergonomic office consistent with your goals and mission statement (from your Midterm Project) and the facts you have been provided. You are to use the fact pattern provided to you in you Midterm Project as the basis for your law office. Remember, you may add facts that add depth to the existing facts, but do not change the facts. If you have added anything to the facts, you must explain what you added in the prose description you prepare for submission and grading.

7 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Unit 7 Written Assignment Your description should include the following information: The philosophy of your law office design (how it is consistent with the mission statement you prepared as the midterm assignment) Why you designed the office in the manner you chose How you believe that the office is ergonomic and conveys the appropriate mood, based on the firm's mission statement and the possible clients in the office How you believe that the design of the office will achieve maximum efficiency In addition, prepare a list of factors you will consider in determining the location of the office. This document should be no more than two pages in length. After listing the factors, write a brief paragraph describing what each factor means and how and why you chose it. For example, if one of your factors for the location of the office is a "high-rise office building," give some description of what you mean by a high-rise office building and why you believe that is an important factor in choosing the location for the office.

8 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Kinds of Fee Agreements - Hourly 1.Attorney/Legal Assistant Hourly Rate 2.Client Hourly Rate 3.Blended Hourly Rate 4.Activity Hourly Rate

9 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Kinds of Fee Agreements 1.Contingency Fees 2.Flat Rate 3.Court-Awarded Fees 4.Value Billing 5. Prepaid Legal Services

10 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Kinds of Fee Agreements - Retainers 1.Earned Retainer – Retainer for General Representation – Case Retainer – Pure Retainer 2.Unearned Retainer – Cash Advance Retainer

11 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Fee Agreements – Preferably in Writing The Model Rules at 1.5(b) states: – (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.

12 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Contingency Agreements – Must Be in Writing The Model Rules at 1.5(c) states: (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 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.

13 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Contingency Agreements – Must be in Writing Model Rule 1.5(c) (continued) 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.

14 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Contingency Agreements Contingency fees cannot be used in criminal and domestic-relation proceedings, according to Model Rule 1.5: – 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.

15 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Contingency Fees Written Contingency Fee Agreement Provides Attorney receives: 20% of any money recovered (plus legal expenses) before case is filed; 25% of any money recovered (plus legal expenses) after case is filed but before trial; 33% of any money recovered (plus legal expenses) during trial or after appeal. Settlement Case is settled for $10,800 after case is filed but before trial. Attorney has $800 worth of legal expenses. Calculation of Contingency Fee 1. Legal expenses are paid first. Settlement of $10,800 Minus Legal Expenses- 800 Balance$10,000 2.Contingency fee is calculated as follows: Total recovery minus legal expenses$10,000 Attorneys 25% Contingency Fee ($10,000 x 25% = $2,500)- 2,500 TOTAL TO CLIENT$ 7,500 3.Total Fees and Expenses to Attorney Reimbursement of Legal Expenses$ 800 Contingency Fee$ 2,500 TOTAL TO ATTORNEY$ 3,300

16 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Only a “Reasonable” Fee Can be Collected No matter what the fee agreement says, only a “reasonable” fee can be collected. Model 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;

17 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Only a “Reasonable Fee” Can be Collected Model Rule 1.5(a) (continued) (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.

18 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Timekeeping and Billing State Bar Oversight of Fee Issues Fraud and Criminal Charges Legal Expenses Timekeeping Billable v. Non-Billable Time

19 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Timekeeping and Billing Six-Minute Intervals 0-6 minutes =.1 hour minutes =.6 hour 7-12 minutes =.2 hour37-42 minutes =.7 hour minutes =.25 hour minutes =.75 hour minutes =.3 hour46-48 minutes =.8 hour minutes =.4 hour49-54 minutes =.9 hour minutes =.5 hour minutes = 1.0 hour

20 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Timekeeping and Billing Quarter Intervals 0-15 minutes =.25 hour minutes =.50 hour minutes =.75 hour minutes = 1.0 hour

21 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Billable Hours Expected for Legal Assistants Billable Hours Per Week / (Annual Max)Percent 6-10 hours (520 hours)1% hours (780 hours)1% hours (1,040 hours)4% hours (1,300 hours)9% hours (1,560 hours)31% hours (1,820 hours)31% hours (2,080 hours)17% hours (2,340 hours)1% More than 45 hours7% Source: National Association of Legal Assistants, 2004 National Utilization and Compensation Survey Report

22 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Average Legal Assistant Billing Rates Source: National Association of Legal Assistants, 2004 National Utilization and Compensation Survey Report RegionLegal Assistant 2004 Average Billing Rate New England/Mideast$93 Great Lakes$95 Plain States$77 Southeast$91 Southwest$89 Rocky Mountains$79 Far West$106

23 ©2007 Thomson Delmar Learning. ALL RIGHTS RESERVED. Timekeeping and Billing Cycle a)Client and attorney reach an agreement on legal fees. b)Attorneys and legal assistants perform legal services and prepare manual time slips. c)Time slips and out-of-pocket expense slips are entered into the computer. d)Pre-billing report is generated and reviewed by managing attorney. e)Client billings are generated and mailed. f)Management reports are generated. g)Client payments are entered in computer.