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Certain billing practices may constitute legal malpractice

On Behalf of | Feb 12, 2024 | Legal Malpractice

Malpractice is the technical term for a scenario in which a licensed or skilled professional does not meet key professional standards and harm results. Sometimes, malpractice leads to a client having an unfavorable outcome or suffering unfair financial setbacks because of a professional they hired.

In the legal profession, malpractice claims often result from gross negligence and major mistakes. However, seemingly minor decisions related to business management could also potentially lead to legal malpractice allegations against a lawyer. For example, there are rules governing the financial conduct of attorneys, especially when it comes to billing their clients. The following are some of the more common financial infractions that might constitute legal malpractice.

Improper management of retainers

Lawyers often require a large payment from new clients to ensure that they can cover the costs of services. A client who pays a retainer upfront can then receive legal support and advocacy without making continual payments. The lawyer bills against what they have already deposited with the firm. There are clear rules about how lawyers should handle retainers. Typically, they require a separate financial account. Depositing a retainer into a general business account or a personal financial account is a violation of best practices, especially if the lawyer ultimately refuses to return the remaining balance of the retainer to the client after the resolution of the legal matter.

Overcharging clients for services

Attorneys get to decide what hourly rate they charge their clients. Negotiating how much the services cost is often part of establishing an attorney-client relationship. Still, lawyers should be honest and transparent when billing their clients for services rendered. Charging half an hour of time for a 15-word email, for example, might be an unfair practice. Lawyers who bill for time that they did not work on a client’s case may burn through their retainer rapidly or may even charge someone thousands of dollars in excess costs based on the amount of time they actually committed to the client’s case.

When a lawyer cannot provide a thorough accounting of how they spent their time on a case or when they break key rules regarding a client’s retainer, an affected client may have grounds for a legal malpractice claim. Going over billing records with an attorney who understands malpractice law could help someone determine whether their lawyer broke financial rules or not.