DIFFICULT MORAL QUESTIONS

Question 191: May professionals bill two clients for the same time?

Like most lawyers and certain other professionals, I bill clients for all the time I actually spend on their affairs. This gives rise to various problems. Here are a couple to which I have not found satisfying solutions, though I have talked them over with a former teacher and some more experienced colleagues.

Clients normally are billed for time spent traveling on their business. Sometimes nothing else can be done for a client during that time, and I might say some prayers or work a crossword puzzle. But on occasion something can be done for another client, and I do it. May I bill both clients for that time?

Again, a client asked me to work on a problem new to me, which required many hours of research. Shortly after completing the work and billing the client—who was pleased with the result but distressed by its cost—something totally unexpected happened. A man I had never seen before came in and asked me to work on virtually the same problem. There was no conflict of interest, because helping him would in no way harm or even affect the first client, and the fact that I had worked on the problem for someone else in no way lessened the likely benefit of my services to the new client. I agreed, and he retained me at my usual hourly fee. With virtually no additional work at all I provided him with the result of my previous research.

May I bill the new client for two-thirds of the time I spent on the research needed to deal with this unusual problem, send half that payment to the regular client as a rebate, and keep half myself? If not, how about billing the new client for half the time I spent on the research and rebating that entire amount to the other client?

Analysis:

This question calls for the derivation and application of norms regarding billing. Professionals should seek only reasonable compensation for the whole of their practice, and generally this rules out billing two clients for the same time. Occasionally, however, a professional who cannot obtain such reasonable compensation except by billing two clients for the same time may bill both, though only if doing so is not unfair for some other reason. With regard to the second problem, having agreed with a client to provide services on an hourly basis, billing more hours than are actually spent serving that client would be fraudulent. So, the questioner may not bill the second client for any of the hours already billed to the first. However, if the questioner had proposed at the outset to bill the second client on a different basis, a fair agreement could have provided sufficient income to rebate part of the cost of the research to the first client.

The reply could be along the following lines:

Questions about double billing concern many professionals. Your examples point to an underlying problem. Billing a client for all the time spent on his or her business or case can be unfair. Professionals should seek only reasonable compensation—that is, compensation for the whole of their practice sufficient to meet moderately all their and their dependents’ current and future genuine needs (see q. 190, above). For many professionals, the range of hourly rates usually charged by others for similar services and the time spent on a matter provide a good starting point for calculating fair fees, but other factors also must be taken into account, including any special characteristics either of the work done or of the two parties.

Though some professionals never bill clients for time spent traveling on their affairs or cases, doing so sometimes is justified. That is so only if the travel is appropriate for doing the client’s business, not billing for it would leave one short of reasonable compensation for the whole of one’s practice, and no other consideration that must be taken into account makes it unfair. Usually that condition, which justifies billing for travel time, is met because the time otherwise would not be productive and would go uncompensated, though it falls within the profes~sional’s normal working hours. But some professionals—for example, those just beginning their practice or spending much of their time in pro bono work—can obtain reasonable compensation for the whole of their practice only by billing for travel time even when it also is used on other productive work that is compensated by another client. Therefore, in your first example, unless billing both clients is necessary for you to obtain reasonable compensation for the whole of your practice and is not otherwise unfair, doing so would be unjustified and doing so merely to increase your income would be avaricious.

As for the second example, your client’s distress at the cost of your service perhaps suggests that the fee was excessive. If so, you owe that client some restitution. Perhaps you failed to let the client know how much time you were spending or likely to spend. In that case, you may have violated the understanding on which you were retained.

Then too, in the early years of their practice, while gaining experience, professionals not only should charge lower than average rates, but sometimes should count part of the time spent on a client’s behalf as used for improving their skills, and so not as billable to the client. Thus, if the problem that was new to you required a disproportionate number of hours of research due to your comparative inexperience, not all those hours should have been billed. Rather, you should have billed at your usual rate only as many hours as it would have taken you to earn the fee an average experienced practitioner would have earned by doing the same work in much less time, and you ought to refund the difference.

Even if your inexperience was not a factor in the time the research took and you in no way violated your understanding with the first client, so that the amount billed was justified, billing the second client for the same hours cannot be justified. Having undertaken to provide your services on an hourly basis, it would be fraudulent to bill the second client for more hours than actually spent on his or her business or case.

Of course, professionals who usually charge their clients by the hour may be justified at times in contracting on a different basis—for example, charging flat rates for services of certain kinds, charging an agreed amount for some particular service, or charging in proportion to the client’s benefit from the service. Flat rates are especially appropriate for making simple, inexpensive, professional services available by advertising to people who otherwise would hesitate to take advantage of them, and also for spreading the costs of providing a service among its many users. Charging a special, negotiated fee for a particular service is especially appropriate for large jobs, especially difficult or repugnant ones, and those whose costs cannot otherwise be fairly distributed among clients. Charging in proportion to the benefit a client gains is especially appropriate in contingent-fee arrangements, which share the rewards of professional service with clients who otherwise could not afford to take the risks. In all such cases, however, the basis for every charge must justify it, and the method of billing must be stated clearly in advance and accepted by the client. In the second example, therefore, you need not have undertaken to provide service to the second client on an hourly basis. Rather, you could have explained the situation, offered the service at a higher price, and rebated at least part of the difference to the first client.

In suggesting the possibility that you solve some billing problems by charging a flat rate, negotiating a fee, or making a contingent-fee arrangement, I do not suggest these methods of billing are morally superior, since each method involves its own difficulties. What is morally required, rather, is that you seek only reasonable compensation for the whole of your practice, defraud nobody, and treat everybody fairly. When in doubt about how to bill, it is good to give clients the benefit of the doubt, bearing in mind that God keeps accurate accounts and will give everyone his or her due (see Rom 2.6–8, 2 Cor 5.10).