Must a lawyer tell the client the hourly rates charged for paralegals and other non-lawyer staff, and can the lawyer bill that non-lawyer time as if it were attorney time?

Plain-English summary

The committee was asked whether a lawyer has a duty to advise the client of the hourly rates charged for services rendered by the lawyer's non-lawyer employees. It answered yes. It was also asked whether the lawyer could include those services within the time billed by the lawyer without disclosing that a non-lawyer performed them. It answered no.

The committee relied on Rule 16-105(B), which requires that, where the lawyer has not regularly represented the client, the basis or rate of the fee be communicated to the client, preferably in writing; on Rule 16-104(B), requiring that the client be informed about matters regarding the representation; and on Rule 16-102(A), requiring that the client be consulted on the means of pursuing the objectives. It concluded these rules require informing the client of the rates and charges for services performed by the lawyer and firm, including the rate for each attorney and each paraprofessional or other non-lawyer who may work on the matter, and disclosure of other service fees and pass-through costs. If the client requests it, the lawyer should also inform the client of the qualifications of the persons who may work on the matter, while the lawyer remains responsible for the professional quality of the work and for supervising and training non-lawyer personnel under Rule 16-503.

The committee concluded that, with proper disclosure, a firm may bill a client for the professional services of non-lawyers such as law clerks, paralegals, and legal assistants who work under the lawyer's supervision; such services should be separately itemized and are normally billed at rates lower than a lawyer's. It further concluded it would be a fraudulent misrepresentation to bill secretarial, law clerk, paralegal, or other non-lawyer services as attorney time. The committee did not address fee arrangements not based on hourly rates, but noted Rule 16-105(A)'s requirement that a fee be reasonable, and that the disclosure and supervisory obligations are not abrogated by the fee arrangement chosen.

Currency note

This opinion was issued in 1990, under the New Mexico Rules of Professional Conduct effective January 1, 1987 (SCRA 1986, Rules 16-102, 16-104, 16-105, and 16-503). It predates the State Bar of New Mexico's November 3, 2008 revisions to those Rules (the New Mexico adoption of the ABA Ethics 2000 changes). Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Does a lawyer have to tell the client the hourly rate charged for paralegal work?

A: Yes. The committee concluded Rules 16-105(B), 16-104(B), and 16-102(A) require disclosure of the rates and charges, including the rate for each attorney and each paraprofessional or non-lawyer who may work on the matter.

Q: Can a firm bill for paralegal and law-clerk time at all?

A: Yes, with proper disclosure. The committee concluded a firm may bill for the professional services of supervised non-lawyers, separately itemized and normally at rates lower than a lawyer's.

Q: Can non-lawyer time be billed as attorney time?

A: No. The committee concluded it would be a fraudulent misrepresentation to represent secretarial, law clerk, paralegal, or other non-lawyer services as attorney time.

Q: Who is responsible for the quality of non-lawyer work?

A: The committee concluded the lawyer remains responsible for the professional quality of the work and must supervise and train all non-lawyer personnel, citing Rule 16-503.

Background and rules framework

The opinion read the fee-communication rule (Rule 16-105, corresponding to Model Rule 1.5), the duty to keep the client informed (Rule 16-104, corresponding to Model Rule 1.4), the scope-and-consultation rule (Rule 16-102, corresponding to Model Rule 1.2), and the duty to supervise non-lawyer assistants (Rule 16-503, corresponding to Model Rule 5.3) together. It treated billing non-lawyer work as attorney time as a misrepresentation, and disclosure plus separate itemization as the cure.

Citations and references

Rules of Professional Conduct:

• Rule 16-105(A), (B) (fees: reasonableness; communication of basis or rate); Rule 16-104(B) (keeping the client informed); Rule 16-102(A) (consultation on means); Rule 16-503 (responsibilities regarding non-lawyer assistants)

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.sbnm.org/Leadership/Committees/Ethics-Advisory-Committee/Ethics-Advisory-Opinions
• Original PDF: https://www.sbnm.org/Portals/NMBAR/AboutUs/committees/Ethics/1990-92/1990-4.pdf

Original opinion text

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

Advisory Opinion 1990-4
The Committee has received an inquiry concerning whether a lawyer has a duty to advise his or her client concerning the
hourly rates to be charged for services rendered by non-lawyer employees of the lawyer. The Committee's answer is
"Yes". The inquirer also asks whether it might be appropriate to include such services within the time billed by the lawyer
without disclosing that the services were rendered by a non-lawyer. The Committee's answer is "No".
Rule 16-105B (SCRA) requires, where the lawyer has not regularly represented the client and established an
understanding concerning fees by their course of dealing that the basis or rate of the fee shall be communicated to the
client, preferably in writing. Similarly, Rule 16-104B (SCRA) requires that the client be informed as to matters regarding
the representation and Rule 16-102A (SCRA) requires that the client be consulted concerning the means by which the
objectives of the representation are pursued. The Committee is of the opinion that these rules require that the client be
informed of the rates and charges for the services performed or to be performed by the lawyer and the law firm. The
disclosure to the client should state the rate for each attorney and paraprofessional or other non-lawyer who will or may
work on the client's matter. If the firm charges for other services, those fees and pass-through costs should also be
disclosed.
If requested by the client, the lawyer should also inform the client concerning the qualifications or expertise of the persons
who may work on the matter. However, the lawyer remains responsible for the professional quality of the work performed
and must assume the responsibility for the supervision and training of all non-lawyer personnel. See Rule 16-503
(SCRA).
The Committee has not addressed those situations in which the negotiated fee arrangements are not based upon hourly
rates. However, the Committee notes that Rule 16-105A (SCRA) states unequivocally that "[a] lawyer's fee shall be
reasonable" and that the lawyer's disclosure and supervisory obligations are not abrogated by the fee arrangement
selected.
It is the Committee's opinion that with proper disclosure it is appropriate for a law firm to bill a client for the professional
services of non-lawyers such as law clerks, paralegals, legal assistants or others who perform services for the client under
the lawyer's supervision. Such services should be separately itemized in the billing to the client and are normally billed at
rates lower than the rates for services of a lawyer. The Committee further believes that it would be a fraudulent
misrepresentation to the client that legal services had been rendered by a lawyer if the billing for secretarial, law clerk,
paralegal or other non-lawyer services were represented as attorney time.