Celebrating 10 years! 2007-2017

was this ethical?

A friend told me this story and wanted to get your thoughts: youngbuck06/29/17
Seems a little shady the way he did it, but the ABA has come thedarkscrivener06/29/17
On point. Just researched this the other day. Turns out Te jeffm06/29/17
I don't see anything wrong if it was accurate. You're workin fettywap06/29/17
unless I'm mistaken, fettywap is missing something, and what dingbat06/29/17
The correct is either dingbats or fettywap depending on what superttthero06/29/17
To add to the above concerning ABA opinion saying an attorne jeffm06/29/17
Well, the whole business model of a law firm that uses assoc onehell06/29/17
youngbuck (Jun 29, 2017 - 9:06 am)

A friend told me this story and wanted to get your thoughts:

"When I first got out of law school, I worked part-time for this solo. I was a 1099 employee and mostly helped with legal research and drafting pleadings. He had this one case I did some work on for him, and he was trying to recoup attorney's fees. He had me draw up a certification that I had been retained by him and I billed x dollars per hours. I expressed some concern at the time because he did not pay me what I was claiming I billed, but his response was that there was a difference between what he billed my work out for and what I was paid per hour."

Was this ethical?

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thedarkscrivener (Jun 29, 2017 - 9:22 am)

Seems a little shady the way he did it, but the ABA has come out and said that it's okay for a firm to hire a contract attorney at one hourly rate and bill for that attorney's work at a higher rate.

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jeffm (Jun 29, 2017 - 11:31 am)

On point. Just researched this the other day. Turns out Texas has an ethics opinion, #577, which deviates a bit from the ABA opinion. Therefore, check your state.

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fettywap (Jun 29, 2017 - 9:41 am)

I don't see anything wrong if it was accurate. You're working for him. He didn't pay you 100% of what you billed, or he wouldn't make any money. If you only worked 10 hours on a brief and he wanted you to say you spent 20, that would be unethical.

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dingbat (Jun 29, 2017 - 10:07 am)

unless I'm mistaken, fettywap is missing something, and what he's asking is very unethical.

If he's asking you for a certification stating how many hours you billed, that's fine. If he wants the certification to state the rate you are paid, that's also fine.

But asking you to state that you bill him a higher rate than you actually bill him, that's not fine. He's allowed to bill you out at a higher rate than he pays you, but he cannot use a false invoice to demand a higher rate. He's basically asking you to (help him) commit fraud.


And, if he's trying to recoup attorney fees in a judicial proceeding, that's a matter of legal record, and you're lying to the court.


Model Rules of Professional Conduct
Rule 3.3 Candor Toward The Tribunal

(a) A lawyer shall not knowingly:

(1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;

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superttthero (Jun 29, 2017 - 10:14 am)

The correct is either dingbats or fettywap depending on what the letter actually says, which I think they'll both agree on.

What an attorney bills at is what they bill the person paying the legal bill. If you are a 1099, that's the attorney hiring you. You bill at what you are paid as 1099. That they may in-turn bill the clients is not what YOU bill at, that's what the firm bills you at including your mark-up.

So if the letter says, "I billed X per hour," then it is unethical/wrong/criminal/fraud/whatever for him to put any amount that wouldn't go on an invoice to the attorney hiring him as a 1099.

If the letter, on it's face or could be easily used to make it seem like he paid you more than he did,

If this happened a long time ago on dead bills though... ¯ _(ツ)_/¯

*I know you said "your friend," I say "you" because it's easier.

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jeffm (Jun 29, 2017 - 11:35 am)

To add to the above concerning ABA opinion saying an attorney may mark-up a contract attorney's billing, while this approach is fine per the ABA (not necessarily your state), be aware of the argument that a statement, such as "I billed the firm $200/hr.," can be a problem of misrepresentation. "The firm bills me at $200/hr." is much better.

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onehell (Jun 29, 2017 - 12:35 pm)

Well, the whole business model of a law firm that uses associates is to buy attorney time at wholesale price and sell it at retail price, so in and of itself that's not an issue, although he probably should have documented the arrangement in advance and there should be a retainer agreement with the client specifying what your hourly rate really is, as opposed to how much of it you get to keep. Of course, in a fee shifting situation like this, the client isn't liable for the attorney fee, so the inquiry could just be whether that fee is "reasonable."

Point being, he probably didn't do it as it ideally should be done, but seeking a legal fee higher than what he paid you doesn't sound like an ethical issue on its face if the fee itself is not unreasonable and he's not pursuing the client for a fee he or she didn't agree to, or trying to take such a fee out of the client's end.

I wonder about the 1099 vs. W2 though. Did you set your own hours, free to decline or accept an assignment, etc? There's no such thing as a "1099 employee." If he was expecting you to show up by a certain time each day and work out of the office then you were probably misclassified.

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