The Profiting ParalegalThe Profiting ParalegalEnsuring Paralegal Fee Recovery Ensuring Paralegal Fee Recovery Through Proper Billing StandardsThrough Proper Billing Standards

Jacqueline S. Vinaccia, Esq.Jacqueline S. Vinaccia, Esq.Sara A. YoungersSara A. Youngers

Lounsbery Ferguson Altona & Peak, LLPLounsbery Ferguson Altona & Peak, LLP

Presented to thePresented to theOrange County Paralegal AssociationOrange County Paralegal Association

July 1, 2010July 1, 2010

WE ALL NEED TO BE WE ALL NEED TO BE PROFITABLE!PROFITABLE!

UNITED STATES SUPREME COURT UNITED STATES SUPREME COURT DECISIONSDECISIONS

Missouri v. JenkinsMissouri v. Jenkins491 U.S. 274, 109 S.Ct.2463 (1989)491 U.S. 274, 109 S.Ct.2463 (1989)

JenkinsJenkins addressed fee recovery under a addressed fee recovery under a Federal Civil Rights Statute (48 USC § 1988).Federal Civil Rights Statute (48 USC § 1988).

Recovery of “reasonable attorney’s fees” means Recovery of “reasonable attorney’s fees” means a reasonable fee for the attorney’s work a reasonable fee for the attorney’s work product.product.

““Reasonable” is historically driven by the Reasonable” is historically driven by the marketplace.marketplace.

If the local marketplace standard allows for If the local marketplace standard allows for separate paralegal billing, then it is recoverable.separate paralegal billing, then it is recoverable.

Richlin Security Service Co. Richlin Security Service Co. v. v.

Chertoff, Secretary of Homeland Security Chertoff, Secretary of Homeland Security 218 S.Ct. 2007(2008)218 S.Ct. 2007(2008)

RichlinRichlin addressed fee recovery under the Equal addressed fee recovery under the Equal Access to Justice Act (5 U.S.C. § 504 and 28 U.S.C. Access to Justice Act (5 U.S.C. § 504 and 28 U.S.C. § 2412 (d)(1)(A) (“EAJA”). § 2412 (d)(1)(A) (“EAJA”).

RichlinRichlin “incurred” “fees” for paralegal services in its “incurred” “fees” for paralegal services in its contract action. Since Section 504(b)(1)(A) awards contract action. Since Section 504(b)(1)(A) awards fees at “prevailing market rates,” a straightforward fees at “prevailing market rates,” a straightforward reading of the statute leads to the conclusion that reading of the statute leads to the conclusion that Richlin was entitled to recover fees for the paralegal Richlin was entitled to recover fees for the paralegal services it purchased at the market rate for such services it purchased at the market rate for such services. (Supra 218 S.Ct at 2012)services. (Supra 218 S.Ct at 2012)

NALA DefinitionNALA Definition A legal assistant or paralegal is a person A legal assistant or paralegal is a person

qualified by education, training or work qualified by education, training or work experience who is employed or retained by a experience who is employed or retained by a lawyer, law office, corporation, governmental lawyer, law office, corporation, governmental agency or other entity who performs agency or other entity who performs specifically delegated specifically delegated substantive legal substantive legal workwork for which a lawyer is responsible. for which a lawyer is responsible.

(Adopted by the ABA in 1997 and by NALA in 2001) (Adopted by the ABA in 1997 and by NALA in 2001)

NFPA DefinitionNFPA DefinitionA Paralegal is a person whoA Paralegal is a person who is qualified through education, is qualified through education,

training or work experiencetraining or work experience

performs performs substantive legal worksubstantive legal work that requires knowledge of legal that requires knowledge of legal concepts (work) is customarily, but concepts (work) is customarily, but not exclusively, performed by a not exclusively, performed by a lawyerlawyer

NFPA DefinitionNFPA Definition

This person may beThis person may be retained or employed by a lawyer, law retained or employed by a lawyer, law

officeoffice governmental agency or other entity governmental agency or other entity

or may be authorized by or may be authorized by administrative, statutory or court administrative, statutory or court authority to perform this work authority to perform this work

““Substantive Legal Work”Substantive Legal Work”

NFPA defines as NFPA defines as “…“…work requiring recognition, work requiring recognition,

evaluation, organization, evaluation, organization, analysis, and communication analysis, and communication

of relevant facts and legal of relevant facts and legal concepts.” concepts.”

California Business & Professions California Business & Professions Code Section 6450(a)Code Section 6450(a)

"Paralegal" means"Paralegal" means qualified by education (Certificate or qualified by education (Certificate or

Bachelors Degree), training, or work Bachelors Degree), training, or work experience (high school diploma plus 3 experience (high school diploma plus 3 years working under the supervision of an years working under the supervision of an attorney)attorney)

either contracts with or is employed by an either contracts with or is employed by an attorney, law firm, corporation, attorney, law firm, corporation, governmental agency, or other entity, andgovernmental agency, or other entity, and

performs substantial legal work under the performs substantial legal work under the direction and supervision of an active direction and supervision of an active member of the State Bar of California.member of the State Bar of California.

California Business & Professions California Business & Professions Code Section 6450(a)Code Section 6450(a)

Tasks performed by a paralegal include, but areTasks performed by a paralegal include, but arenot limited to, case planning, development, andnot limited to, case planning, development, and

management; legal research; interviewing clients;management; legal research; interviewing clients;fact gathering and retrieving information; draftingfact gathering and retrieving information; drafting

and analyzing legal documents; collecting,and analyzing legal documents; collecting,compiling, and utilizing technical information tocompiling, and utilizing technical information to

make an independent decision andmake an independent decision andrecommendation to the supervising attorney; andrecommendation to the supervising attorney; and

representing clients before a state or federalrepresenting clients before a state or federaladministrative agency if that representation isadministrative agency if that representation is

permitted by statute, court rule, or administrativepermitted by statute, court rule, or administrativerule or regulation. rule or regulation.

Making the Paralegal ProfitableMaking the Paralegal Profitable PRACTICAL CHALLENGESPRACTICAL CHALLENGES

Paralegals bill at a lower rate. Thus, Paralegals bill at a lower rate. Thus, reductions are easier for attorneys and reductions are easier for attorneys and firms to accept.firms to accept.

Paralegal tasks are often repetitive and Paralegal tasks are often repetitive and tedious. Thus, it is harder to tedious. Thus, it is harder to communicate the importance of the task communicate the importance of the task and easy to misidentify as clerical.and easy to misidentify as clerical.

Start at the beginning….Start at the beginning….COMMUNICATE!COMMUNICATE!

COMMUNICATECOMMUNICATE With your attorneys.With your attorneys.

Give timeframe estimates for completing a Give timeframe estimates for completing a task.task.

Make sure you are doing what has been Make sure you are doing what has been requested.requested.

With your clients.With your clients. Time is money and your clients may not want Time is money and your clients may not want

to pay for certain services.to pay for certain services. Put it in the Retention Agreement.Put it in the Retention Agreement.

Communicate Through Your Communicate Through Your Billing DescriptionsBilling Descriptions

Billing descriptions should be a short Billing descriptions should be a short explanation of what was done and explanation of what was done and WHYWHY

Use page, name and date references Use page, name and date references when necessary.when necessary.

When there are multiple drafts or edits, When there are multiple drafts or edits, indicate it in the entry.indicate it in the entry.

When using software, focus on the overall When using software, focus on the overall task and not the software used.task and not the software used.

Improper Billing PracticesImproper Billing Practices

CLERICAL BILLINGCLERICAL BILLING Paralegals are not Secretaries! Don’t Paralegals are not Secretaries! Don’t

Bill Like One.Bill Like One. Making CopiesMaking Copies Calling Court ReportersCalling Court Reporters Organizing FilesOrganizing Files Reviewing Case FileReviewing Case File Scheduling MeetingsScheduling Meetings Loading Documents into DatabasesLoading Documents into Databases

Example of Clerical BillingExample of Clerical Billing

BLOCK BILLINGBLOCK BILLINGBlock Billing is the practice by Block Billing is the practice by

which multiple tasks are lumped which multiple tasks are lumped into one single time entry.into one single time entry.

Fee statements (i.e. billing Fee statements (i.e. billing entries) should be itemized by entries) should be itemized by task and not aggregated on a task and not aggregated on a daily basis.daily basis.

Example of Block BillingExample of Block Billing

INADEQUATE BILLINGINADEQUATE BILLINGGeneral or vague work descriptions General or vague work descriptions

are an unacceptable billing are an unacceptable billing practice. practice.

Time entries should specify the Time entries should specify the attorney, the date, the hours attorney, the date, the hours expended, and a description of the expended, and a description of the work done work done sufficient to evaluate sufficient to evaluate its appropriateness .its appropriateness .

Example of Inadequate Billing Example of Inadequate Billing

INTRA-OFFICE CONFERENCINGINTRA-OFFICE CONFERENCING

““A standard pattern of excessive A standard pattern of excessive communication…cannot be communication…cannot be considered to be quality billable considered to be quality billable hours reasonably chargeable to hours reasonably chargeable to the client.” In re Colorado-Ute the client.” In re Colorado-Ute Electric Association, Inc. 132 B.R. Electric Association, Inc. 132 B.R. 174, 178 (Bkrtcy.D.Colo., 1991)174, 178 (Bkrtcy.D.Colo., 1991)

Example of Intra-Office ConferencingExample of Intra-Office Conferencing

Billing in the Modern EraBilling in the Modern Era

E-Document Tasks E-Document Tasks

Focus on the “what” and not on Focus on the “what” and not on the softwarethe software

Incorporate the document Incorporate the document loading into the overall task (i.e. loading into the overall task (i.e. record summary, privilege record summary, privilege review, redacting and production)review, redacting and production)

USE GOOD BILLING JUDGMENTUSE GOOD BILLING JUDGMENT Would I pay this bill if you presented it Would I pay this bill if you presented it

to me?to me? Is the task beneficial to the Is the task beneficial to the

advancement of the case?advancement of the case? Are your entries sufficiently described?Are your entries sufficiently described? When in doubt, ask your attorney for When in doubt, ask your attorney for

help.help.