Rounding Hours: Which Way Do Your Fees Curve?
Attorney billing is often a controversial subject. And one of the biggest concerns when it comes to hourly billing is the rounding of those hours.
For the most part, lawyers are rarely known for rounding their hours down. After all, once a billing increment has started, there's no smaller increment, and there's no turning back. For lawyers that bill on the quarter hour, rather than the tenth of the hour, rounding up can enable an attorney to squeeze in more hours than there are in a full day, let alone a workday. And like anything that involves asking clients for money, there are pitfalls.
Line Item Gouging
For firms, rather than clients, that insist on single task line item billing, clients may be upset if they find out that this is not universal. Single task line item billing involves billing each individual task as a separate line item.
An extreme example would be an attorney receiving and sending an email. Though doing either only took a couple minutes, in single task line item billing, receiving the email would be billed for separate at a minimal charge of one billing increment (either a tenth of an hour, or a quarter hour), and sending the email would also be charged separately as a billing increment.
Effectively, this means that, in a quarter hour billing increment system, five minutes can be billed as thirty minutes.
Billing the Competitive Advantage
Clients are becoming increasingly savvy and critical when it comes to hourly billing, and firms may want to consider updating their policies on rounding time. Having clear policies that minimize the amount of time that gets billed to the client can be touted to give a firm a competitive advantage in the marketplace.
For instance, single task line item billing policies can have exceptions for de minimis tasks that take less than two minutes, like reading or sending short emails, text messages, or even a quick phone call. Rather than billing a single increment, these can be tracked as completed tasks that only equal a single billing increment after 2 or 3 or 5 or more get completed, depending on the billing increment used.
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