PB: Block Billing – More Than Meets the Eye?
by SDM
One of SDM’s keen-eyed readers observed the exchange at the last council meeting regarding the village attorney’s billing practices. SDM went back to the tape and agrees that the Mayor made a very telling comment.
But before SDM gets there, let’s set the stage. The village for a long time has placed its legal bills on the agenda under the “consent” section. The consent agenda is like a negative check-off, meaning that if a member has an issue with an item in the consent section, she must pull the item and place it on the regular agenda. Otherwise, everything on the consent agenda passes.
Usually, the items on the consent agenda are simple, noncontroversial and require little deliberation. Before Palmetto Bay became litigation central, it may have made sense to put its legal bills on the consent agenda. Today, given the substantial drain on resources these bills represent, SDM thinks they should be given more scrutiny and apparently so does Vice Mayor Dubois. The Mayor thinks not, apparently, but again we are getting ahead of ourselves.
Vice Mayor Dubois did his own review of the legal bills and using a businessman’s eye noticed a problem:
I pulled this item from the agenda because I wanted to make a point. In the spirit of transparency, we need to avoid any future block billing. That is, [the] billing where a four or five hour block of time is associated with 5, 6, 7 different projects with indefinite time amounts that we’ve seen on the bills. So… [the village attorney] has accommodated us on the most recent bill and I believe on a going-forward basis that it will be addressed. The issue is the inability to audit the billing records as well as the inability to reconcile them back to projects to do project-specific cost accounting. So I think it’s very important that we get away from this block billing that’s been instituted relatively recently.
Sounds eminently reasonable to SDM, but Mayor Stanczyk didn’t think so. She asked the village attorney if this practice was recent. The village attorney replied that it had been the billing practice for over ten years. The Mayor then continued:
Alright, umm…well as long as we’re not busy doing billing as opposed to giving attention to legal work. I think, uh, legal work is the priority here.
SDM Code Breaker: There are a couple of interesting things to notice from this exchange:
- Vice Mayor Dubois, in his first meeting, noticed a billing practice that the manager should have flagged years ago. When the attorney bills the village four-hours of time on several matters, there is no way to allocate precisely those costs to the projects or matters addressed. Legal costs, then, are not considered when the manager calculates the total costs of the projects or matters under his purview. That the village may not be doing project-specific cost accounting should concern every member of the council, including Mayor Deputy Amigo.
- It’s bad enough that the Mayor missed the point of Mr. Dubois’s observation as she busily attempts to protect her flank. What’s worse, however, is the implication of her question: because the misleading billing has been going on for a decade, that makes the practice okay. The practice is not okay and the village leadership should have caught it sooner.
- To top off her performance, Mrs. Stanczyk displayed a further misunderstanding of the issue with her nonsensical statement regarding the village attorney “giving attention to legal work” versus being “busy doing billing.” The village doesn’t give a darn how much time the village attorney spends on billing because taxpayers don’t pay her to compile her bills. This is Management 101 for crying out loud.
SDM Says: Mayor Stanczyk perpetually ignores the compulsion to opine on every topic under discussion, even when it is obvious she hasn’t thought the matter through. SDM thinks the Mayor should consider adhering to the old adage, it’s better to stay silent and be thought a fool than to speak and remove all doubt.
It was a really interesting, albeit brief, exchange. Ms. Boutsis had no objection and appeared to find Mr. Dubois’ request reasonable, yet our Mayor clearly did not want the new kid on the block to score any points. Our Mayor is clearly greeting any suggestion of change with strong resistance. Doesn’t she realize that old dogs can learn new tricks? New ideas & change are good things. It will be interesting watching the new group dynamics develop.
In general, Rule 4-1.5 of the Florida Rules of Professional Conduct govern attorney billing.
http://www.floridabar.org/divexe/rrtfb.nsf/FV/A8644F215162F9DE85257164004C0429
Interpreting this rule, I find two cases on the issue of attorney billing practices instructive:
In The Florida Bar v. Richardson, 574 So.2d 60, 62-63 (Fla. 1991), the Florida Supreme Court determined:
Lawyers are officers of the court. The court is an instrument of society for the administration of justice. Justice should be administered economically, efficiently, and expeditiously. The attorney’s fee is, therefore, a very important factor in the administration of justice, and if it is not determined with proper relation to that fact it results in a species of social malpractice that undermines the confidence of the public in the bench and bar. It does more than that; it brings the court into disrepute and destroys its power to perform adequately the function of its creation.
Baruch v. Giblin, 122 Fla. 59, 63, 164 So. 831, 833 (1935) (emphasis added). Mr. Richardson is an officer of the court, subject to its orders. We find that these were clearly excessive fees and that the amounts he charged did in fact constitute a “social malpractice.” The Florida Bar Code of Professional Responsibility, Disciplinary Rule 2-106, entitled “Fees for Legal Services,” provides, in pertinent part:
(A) A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee.
(B) A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee.
Ethical Consideration 2-17 of the Model Code of Professional Responsibility explains that a lawyer must charge clients reasonable fees because the “excessive cost of legal service would deter laymen from utilizing the legal system in protection of their rights.” This Court recognizes that a lawyer’s fee will vary in accordance with many factors; however, we fully concur with the expert witness’s statement in this case that all of the time a lawyer spends on a case is not necessarily the amount of time for which he can properly charge his client. As explained by the expert witness, “[I]t’s the time that reasonably should be devoted to accomplish a particular task.” This statement is consistent with the principles we set forth in Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla.1990), and Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985), neither of which allows billing clients solely on billable hours or charging clients without determining what is the reasonable time to accomplish a particular task. Further, absolutely no justification exists to bill for twenty minutes for every phone call or for a minimum of forty-five minutes to prepare a page of a document without regard to the amount of time actually spent. Nor is it proper to bill clients for pro bono services to be rendered to others. (underlining added).
The significant factors in determining a reasonable fee in this case include the amount involved and the benefit to the client, neither of which is disputed. Particularly important is the amount of time that should have been devoted to accomplish these particular tasks. We find that any prudent lawyer would find that the fees in this case were clearly excessive.
The case of The Florida Bar v. Herzog, 521 So.2d 1118 (Fla. 1988) is also instructive.
Here the Florida Supreme Court found the following:
[Where] Respondent ordinarily utilized a one-page statement for describing his services rendered in which he described only the total hours and costs . . . the respondent’s [invoices were] deceptive billing practices [sufficient to] warrant a harsher penalty than the private reprimand recommended by the referee. The referee found that respondent “adjusted” his bills . . . so that these clients would not be privy to the exorbitant costs incurred relative to fees. Once a bill was paid, respondent ‘readjusted’ it so that the advanced costs would be covered. Respondent admitted that he did this and did so because he did not think the clients would authorize the expenditures.
The falsification in any manner of bills to clients is unethical and reprehensible. Billing practices, like every other aspect of client dealing, should be conducted in a scrupulously honest manner.
We conclude therefore that suspension is appropriate.
Perhaps, Mayor Stanczyk should take a primer attorney billing practices just in case the thought crosses her mind to stop the bleeding of legal fees.
For those who would like to read the suit Jim Araiza filed against Pegram, Templer, Lovely, et al., go to:
http://www.recallpalmettobay.com/uploads/Araiza_v._Pegram_et_al.pdf
Block billing? I’ve owned and operated businesses for over 35 years and would never accept so-called ‘block billing’ with no clear allocation of legal fees and expenses to specific engagements. How would I know what I’m paying for? It is an irresponsible practice by PB and serves no other purpose than to hide outrageous and embarrassing legal costs aka Palmer Trinity and other self-generated litigation..
I would encourage John DuBois to NOT consent automatically to each of Eve’s bills. My understanding is that if one councilperson does not agree to put something on the consent agenda, then it cannot go on the consent agenda. That way, we may start getting some sunshine poured on the amount the village is spending for attys fees.
Start packing Shelley.
I know this is one of many scurrilous canards run by this sight, but have you seen this tripe:
http://pbcheckstherecord.org/2012/10/21/karyn-cunningham-the-anonymous-letter-writer-and-flinns-candidate-south-dade-updates-and-flinn-on-palmer-and-setting-up-palmetto-bay-to-lose/#respond
The really sad fact is that we have a current government run by a mayor and at least one council member in serious need of psychiatric counselling if not medication. Was the BS they put out during the campaign simply evil misrepresentation of the facts to win elections at any cost or do the strange comments and fictional story telling live at the polls and on the blog confirmed organic paranoia?
It is sad to say, but I think that Jim Araiza’s attorney move for an compulsory medical exam to determine the mental competency of the defendants.
As a non-clinician, but someone familiar with the DSM IV TR, I would concur with the latter. The following may prove helpful for the paranoiacs and their supporters running the village.
One point worth noting below, those with paranoia, personality disorder are often viewed as “litigious.”
Definition
Paranoia is an unfounded or exaggerated distrust of others, sometimes reaching delusional proportions. Paranoid individuals constantly suspect the motives of those around them, and believe that certain individuals, or people in general, are “out to get them.”
Description
Paranoid perceptions and behavior may appear as features of a number of mental illnesses, including depression and dementia, but are most prominent in three types of psychological disorders: paranoid schizophrenia, delusional disorder (persecutory type), and paranoid personality disorder (PPD).
Individuals with paranoid schizophrenia and persecutory delusional disorder experience what is known as persecutory delusions: an irrational, yet unshakable, belief that someone is plotting against them. Persecutory delusions in paranoid schizophrenia are bizarre, sometimes grandiose, and often accompanied by auditory hallucinations. Delusions experienced by individuals with delusional disorder are more plausible than those experienced by paranoid schizophrenics; not bizarre, though still unjustified. Individuals with delusional disorder may seem offbeat or quirky rather than mentally ill, and, as such, may never seek treatment.
Persons with paranoid personality disorder tend to be self-centered, self-important, defensive, and emotionally distant. Their paranoia manifests itself in constant suspicions rather than full-blown delusions. The disorder often impedes social and personal relationships and career advancement.
Some individuals with PPD are described as “litigious,” as they are constantly initiating frivolous law suits. PPD is more common in men than in women, and typically begins in early adulthood.
Causes and symptoms
The exact cause of paranoia is unknown. Potential causal factors may be genetics, neurological abnormalities, changes in brain chemistry, and stress. Paranoia is also a possible side effect of drug use and abuse (for example, alcohol, marijuana, amphetamines, cocaine, PCP). Acute, or short term, paranoia may occur in some individuals overwhelmed by stress.
The Diagnostic and Statistical Manual of Mental Disorders, fourth edition (DSM-IV), the diagnostic standard for mental health professionals in the United States, lists the following symptoms for paranoid personality disorder:
suspicious; unfounded suspicions; believes others are plotting against him/her preoccupied with unsupported doubts about friends or associates reluctant to confide in others due to a fear that information may be used against him/her reads negative meanings into innocuous remarks bears grudges perceives attacks on his/her reputation that are not clear to others, and is quick to counterattack maintains unfounded suspicions regarding the fidelity of a spouse or significant other
Diagnosis
Patients with paranoid symptoms should undergo a thorough physical examination and patient history to rule out possible organic causes (such as dementia) or environmental causes (such as extreme stress). If a psychological cause is suspected, a psychologist will conduct an interview with the patient and may administer one of several clinical inventories, or tests, to evaluate mental status.
Treatment
Paranoia that is symptomatic of paranoid schizophrenia, delusional disorder, or paranoid personality disorder should be treated by a psychologist and/or psychiatrist. Antipsychotic medication such as thioridazine (Mellaril), haloperidol (Haldol), chlorpromazine (Thorazine), clozapine (Clozaril), or risperidone (Risperdal) may be prescribed, and cognitive therapy or psychotherapy may be employed to help the patient cope with their paranoia and/or persecutory delusions. Antipsychotic medication, however, is of uncertain benefit to individuals with paranoid personality disorder and may pose long-term risks.
If an underlying condition, such as depression or drug abuse, is found to be triggering the paranoia, an appropriate course of medication and/or psychosocial therapy is employed to treat the primary disorder.
Prognosis
Because of the inherent mistrust felt by paranoid individuals, they often must be coerced into entering treatment. As unwilling participants, their recovery may be hampered by efforts to sabotage treatment (for example, not taking medication or not being forthcoming with a therapist), a lack of insight into their condition, or the belief that the therapist is plotting against them. Albeit with restricted lifestyles, some patients with PPD or persecutory delusional disorder continue to function in society without treatment.
Key terms
Persecutory delusion — A fixed, false, and inflexible belief that others are engaging in a plot or plan to harm an individual.
Resources
Organizations
American Psychiatric Association. 1400 K Street NW, Washington, DC 20005. (888) 357-7924. http://www.psych.org.
American Psychological Association (APA). 750 First St. NE, Washington, DC 20002-4242. (202) 336-5700. http://www.apa.org.
National Alliance for the Mentally Ill (NAMI). Colonial Place Three, 2107 Wilson Blvd., Ste. 300, Arlington, VA 22201-3042. (800) 950-6264. http://www.nami.org.
National Institute of Mental Health. Mental Health Public Inquiries, 5600 Fishers Lane, Room 15C-05, Rockville, MD 20857. (888) 826-9438. http://www.nimh.nih.gov.
Everyone is out to get us…..