Although 15 Minute Billing Increments Are Not Per Se Offensive, Many Cases, Guidelines, And Commentary Suggest (Or, In Some Cases Require) 6 Minute Billing Increments.
We thank Keith Turner of Santa Monica, who argued and obtained a precedential HOA fee-shifting decision in his client homeowner’s favor, for bringing to our attention the next decision from the Wyoming Supreme Court—which might inspire some California practitioners to move to Wyoming!
In Manigault v. Daly & Sorenson, LLC, 2018 WY 33 (Wyo. Sup. Ct. Mar. 27, 2018), the Wyoming Supreme Court affirmed conclusions that a law firm’s billing of 15 minutes increments and billing of inter-office communications on a case were appropriate, especially where the attorneys demonstrated that they usually “rounded down” in billing and only billed for lengthy conferences rather than off-the-cuff communications.
BLOG OBSERVATION—Although this outcome was fairly fact-specific, readers should be aware of the fact that 6 minutes billing increments are mandatory in some situations, most generally Chapter 11 bankruptcy matters and civil practice before the Northern District of California federal court. (See U.S. Trustee’s Office Guidelines; General Order of the Matter of Procedures for Complex Chapter 11 Cases, E.D. Va.; N.D. Cal. Website “Billing Increment Chart,” saying “time for work spent performing a service should be reported in tenths of an hour”.) The California State Committee on Mandatory Fee Arbitration, in its Arbitration Advisory 2016-02, has suggested that high incremental charges, such as 15-minute increments, may be viewed with suspicion by courts and fee arbitrators. Cases from other jurisdictions and ethics commentators also strongly seem to prefer 6-minute (or .10) time increments, because increments above that are subject to abuse or result in overbilling. (See, e.g., In re Myers, No. 95,132 (Kan. Sup. Ct. Feb. 3, 2006) [lawyer impermissibly rounded up his billable time to 1 hour minimum time increments when he spent at least 45 minutes on any given task]; Conoco, Inc. v. Director, OWCP, 194 F.3d 684 (5th Cir. 1999) [judicial precedent in the jurisdiction had found billing in quarter hour increments to be suspect; however, court determined the fees assessed were reasonable under the circumstances]; In re Barrie Reed Buick-GMC, Inc., 164 B.R. 378 (Bankr. S.D. Fla. 1997) [reducing fee request based upon one-quarter hour increment billing because many of the phone calls seemed to be of shorter duration based on the fee billing descriptions]; Matter of Scimeca, 265 Kan. 742, 962 P.2d 1080 (Kan. Sup. Ct. 1998) [a lawyer may bill in .25 increments but only when the time is spent on the client’s business]; D. Richmond, The New Law Firm Economy, Billable Hours, and Professional Responsibility, 29 HOFSTRA L. REV. 207 (2000).) The same result has been reached in at least one California unpublished decision. (Ekstrom v. Marquesa at Monarch Beach Homeowners Assn., Case No. G039289, 2008 WL 4768861 (Cal.App. 4th Dist., Div. 3 Nov. 3, 2008 unpublished; author: O’Leary, J., discussed in our November 5, 2008 post) [courts found merit in defense argument that billing in minimum quarter hour increments resulted in overbilling by plaintiff’s prevailing attorneys, leading to proper reductions in the fee request].)