Can a lawyer bill in rounded standard time units, like 15 minutes, regardless of the actual time spent on a task?

Plain-English summary

The opinion addresses whether a lawyer may charge for a standard time unit, with or without notice to the client, regardless of how much time is actually spent. The Board concludes a lawyer may bill in standard units so long as the fee is not unreasonable and the lawyer communicates the billing method to the client.

The opinion observes that clients ordinarily need only enough precision in billing to judge reasonableness and fairness, not hair-splitting accuracy, and that many lawyers bill in standard units of six to fifteen minutes. Rounding up is permissible (citing ABA Formal Opinion 93-379), but repeatedly rounding up from one minute to fifteen is questionable and raises substantial reasonableness issues under Rule 1.5(a). The opinion suggests a lawyer can avoid a challenge by using a smaller unit, preferably six minutes, and rounding up only when more than half the unit was actually expended.

Even billing in six-minute units while charging a unit only when more than three minutes was spent results in billing for some time not actually expended, so disclosure matters. Rule 1.5(b) requires that, when the lawyer has not regularly represented the client, the basis or rate of the fee be communicated, preferably in writing, before or within a reasonable time after commencing the representation. The opinion concludes that simply telling a client the lawyer bills on a time-expended basis, without explaining the standard-unit practice, is not a clear communication of the fee basis.

The opinion also applies Rule 7.1(a)(1), which treats a communication about a lawyer's services as misleading if it omits a fact necessary to keep the statement, as a whole, from being materially misleading. Telling a client only that billing is time-expended, without explaining the standard-unit practice, omits such a fact and violates Rule 7.1(a). To ensure a clear understanding, the opinion directs the lawyer to provide a written explanation of the fee basis that includes any standard-unit billing practice.

In practice

The opinion holds that, under the Georgia rules as they stood at the time of the opinion, a lawyer may bill in standard time units only where the resulting fee remains reasonable under Rule 1.5(a) and the lawyer clearly communicates the standard-unit practice to the client. The opinion treats repeatedly rounding up small increments to a large unit as raising substantial reasonableness questions, and suggests using a six-minute unit and rounding up only when more than half the unit was actually expended. It directs that the fee basis, including any standard-unit practice, be explained to the client, preferably in writing, to satisfy both Rule 1.5(b) and Rule 7.1(a).

Common questions

Q: Can a Georgia lawyer bill in rounded units like a quarter hour?

A: Yes, within limits. The opinion concludes a lawyer may bill in standard time units so long as the fee is not unreasonable under Rule 1.5(a) and the lawyer communicates the billing method to the client.

Q: Is it improper to round one minute of work up to fifteen minutes?

A: The opinion states that while rounding up is permissible, repeatedly rounding up from one minute to fifteen is questionable at best and raises substantial issues of whether the fee is reasonable under Rule 1.5(a); it suggests a six-minute unit, rounding up only when more than half is expended.

Q: Does the lawyer have to tell the client about standard-unit billing?

A: Yes. The opinion concludes that merely saying the lawyer bills on a time-expended basis, without explaining the standard-unit practice, fails to communicate the fee basis under Rule 1.5(b) and omits a fact that makes the statement materially misleading under Rule 7.1(a). The explanation should be in writing.

Background and rules framework

The opinion interprets Georgia Rule of Professional Conduct 1.5(a) (reasonableness of fees) and 1.5(b) (communicating the basis or rate of the fee; Model Rule 1.5), together with Rule 7.1(a)(1) (communications about a lawyer's services that omit a material fact; Model Rule 7.1). It relies on ABA Formal Opinion 93-379 (1993) on rounding and on Ross, The Honest Hour: The Ethics of Time-Based Billing by Attorneys (1996). The opinion notes that Rule 1.5(b) was amended on November 3, 2011, but states the amendment does not change its conclusion.

Citations and references

Rules of Professional Conduct:

• Georgia RPC 1.5(a), (b) (reasonable fees; communicating the fee basis) / Model Rule 1.5
• Georgia RPC 7.1(a)(1) (false or misleading communications) / Model Rule 7.1

Other opinions cited:

• ABA Formal Opinion 93-379 (1993): billing for fees and expenses, including rounding

Other authority:

• Ross, The Honest Hour: The Ethics of Time-Based Billing by Attorneys (1996)

See also

• ABA Formal Op. 93-379: Billing for Fees and Expenses
• GA Ethics Op. 05-5: Borrowing to Advance Case Costs

Source

• Landing page: https://www.gabar.org/handbook?rule=rule467

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

STATE BAR OF GEORGIA
ISSUED BY THE SUPREME COURT OF GEORGIA ON MAY 3, 2001
FORMAL ADVISORY OPINION NO. 01-1

Rule 1.5(b) is recited in this opinion; however, on November 3, 2011, Rule 1.5(b) was amended by the Supreme Court of Georgia and now reads as follows:

“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.”

The amendment does not impact the analysis or conclusion reached in this opinion.

QUESTION PRESENTED:

Is it ethically permissible for an attorney, with or without notice to a client, to charge for a standard time unit without regard to how much time is actually expended?

SUMMARY ANSWER:

A lawyer may charge for standard time units so long as this does not result in a fee that is unreasonable, and so long as the lawyer communicates to the client the method of billing the lawyer is using so that the client can understand the basis for the fee.

OPINION:

Given the proper resources, equipment and effort, time can be measured with infinitesimal precision. As a practical matter, however, clients routinely require only sufficient precision in attorney billings to determine reasonableness and fairness, and this would not normally necessitate a level of precision in recording the time expended by an attorney that would require hair-splitting accuracy. It is the practice of many attorneys to bill on a time-expended basis, and to bill for time expended by rounding to standard units of from 6 to 15 minutes. This gives rise to the possibility that a lawyer could spend one minute on a client matter, and bill the client for 15 minutes. While "rounding up" is permissible, see, e.g., ABA Formal Opinion 93-379 (December 6, 1993), repeatedly rounding up from one minute to fifteen minutes is questionable at best and would raise substantial issues as to whether the fee was reasonable under Rule 1.5(a), Georgia Rules of Professional Conduct. See also Rule 1.5(a) ABA Model Rules of Professional Conduct. A lawyer could avoid a challenge to rounded up fees as excessive by using a smaller minimum unit (a six minute unit is preferable), and only rounding up if more than half that time was actually expended. See Ross, The Honest Hour: The Ethics of Time-Based Billing by Attorneys (Carolina Academic Press: 1996), p. 169.

It must be noted that even this practice, billing in six minute units but only billing a unit if more than three minutes was expended, results in the attorney billing for time not actually expended on the client matter. Rule 1.5(b), Georgia Rules of Professional Conduct, provides:

When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.

In order to comply with Rule 1.5(b), the lawyer must take care to clarify to the client the basis for the billing. To simply inform a client that the lawyer would bill on a time expended basis, without explaining any standard unit billing practice, would not be a clear communication of the basis for the fee.

In addition, we note that Rule 7.1(a)(1), Georgia Rules of Professional Conduct, governs "Communications Concerning a Lawyer's Services", and provides:

[A] communication is false, fraudulent, deceptive or misleading if it:

(1) ...omits a fact necessary to make the statement considered as a whole not materially misleading.

Comment 1 to Rule 7.1 provides that Rule 7.1 to applies to "all communications about a lawyer's services...."

To simply inform a client that the lawyer would bill on a time expended basis, without explaining any standard unit billing practice, would omit a fact necessary to make the statement as a whole not materially misleading, and would violate Rule 7.1 (a).

To insure a clear understanding between the attorney and the client, the attorney should provide the client with an explanation in writing of the basis for the fee. Rule 1.5(b), Georgia Rules of Professional Conduct. See also Rule 1.5(b) ABA Model Rules of Professional Conduct. In order to comply with Rule 1.5(b), the attorney must communicate the basis for the fee to the client, and in order to comply with Rule 7.1(a), the communication must include an explanation of any standard unit billing practice.