January 10, 2013
Although it may be clear why this is “necessary” (i.e. we have to pay the bills somehow), it’s not initially clear why billing your clients is “evil.” Unless you’ve actually had to do it.
Sending a bill for thousands of dollars to a client when you’ve given nothing but your time (or the occasional document) is not anywhere near the best part of the job, but it’s not as bad as dealing with client disputes over their bills.
Fortunately, most of the time (assuming that you’ve sent regular, sufficiently detailed invoices), client concerns can be dealt with fairly easily, especially if the client voices such concerns at the time that the invoice is delivered.
But what if a client doesn’t express his or her concerns with your bill, and further refuses to pay you what you are owed because of these concerns?
This is a major headache when it happens, but, as one case demonstrates, if your invoices are regular and sufficiently detailed and your rates are reasonable, the client’s objections to your bill will likely fail in court.
The case is Courten & Villar PLLC v. Alcosser, out of Suffolk County New York, and the facts are generally the same as described above:
The law firm Courten & Villar represented a client in his visitation, custody and support proceedings from March of 2008 until November of 2009; throughout that period, Courten & Villar sent invoices to the client on a monthly basis.
The client paid an initial retainer of $5,000 and two additional payments totally $9,000; there were no bill disputes throughout the period of time that Courten & Villar represented the client.
However, in November 2009, it became clear that the client had no intention of paying his remaining balance of $28,560.47 to Courten & Villar, and, consequently, the law firm did what no lawyer hopes to never have to do: it sued the client to recover the unpaid attorney’s fees.
Hot Doc: Courten & Villar PLLC v. Alcosser
At trial, the retainer agreement and copies of the itemized bills were submitted into evidence.
In addition, attorney Karyn Villar testified on behalf of her law firm, and the client’s (appearing pro se) first question to Villar on cross-examination was about why she did not “employ a forensic accountant” in the client’s family law proceedings.
The issue, though, wasn’t whether the law firm did its job to the client’s satisfaction, but “whether it provided and properly billed for its services and whether [the client] owed a balance” (of which the court reminded the client).
Apparently, the client didn’t get the hint, since, during his testimony, he again expressed his dissatisfaction with the outcome of his family law proceedings and with the law firm.
When asked by the court to address any billing discrepancies, the client was unable to produce any examples that withstood scrutiny from the court.
In the end, the court decided that the client’s complaints were baseless.
The court found that not only had Courten & Villar sent regular invoices that provided sufficient detail “that substantial services were rendered” and that the firm’s rates were “fair and reasonable,” but also that Courten & Villar had incurred 62 hours of total time on the client’s behalf that he wasn’t charged for.
In addition, although the retainer provided for late fees of 5%, Courten & Villar never charged any such fees for the client’s non-payment.
It’s a shame that generous attorney discounts go unappreciated by some clients, but it didn’t escape the court’s notice here.
Although the ruling in Courten & Villar’s favor didn’t add in those additional 62 hours to the client’s existing $28,000+ balance, it did apply the 5% late fee in the form of “simple interest in the amount of 5% accrued from January 1, 2010 until January 1, 2013.”
Presumably, this 5% is compounded annually instead of monthly (the billing cycle periods), since the interest under the latter timeframe would cause the interest amount to exceed $50,000; still, the interest award compounded annually still amounts to over $4,500.
In any case, the ruling should provide encouragement to attorneys engaged in billing disputes with troublesome clients, since, assuming they did everything properly, courts are very likely to side with the attorneys in such cases.