How do you bill for contract attorneys

When you have a contract attorney work for you, how do you bill your client? How do you write his/her time on your bill?

This issue has been litigated. The conclusion is that the contract attorney is not an out-of-pocket cost for billing purposes. You are not required to bill the client at the cost to you for his/her time. You may bill the client for the contract attorney at an “attorney’s rate” or any reasonable rate you establish in your engagement agreement acceptable to the client.

There are at least three approaches to this. One is to name the contract attorney and his/her billing rate in your engagement agreement.

This would be ideal, but sometimes you don’t know whether you will need a contract attorney to help you and, if you do, who you will engage to be that contract attorney. In such circumstances, you may want to insert in your engagement agreement that any contract attorney you engage to assist you in pursuing the client’s matter will be billed at a standard rate of $X.

Another alternative is make sure that your billing rate is high enough to cover all “overhead” expenses which would then include all of your staff including secretarial help, paralegal, and contract counsel.

Yet another approach is for the contract attorney to bill the client directly. This approach, however, risks your control of the client relatinship and I wouldn’t recommend it.

Categorized in: Management