8.3 Timekeeping, Billing, Retainers & Conflict Checks

This section is the money-and-loyalty operating system of the firm. The ethics chapters already taught the rules: lawyers set fees, unearned advances sit in trust, time must be honest, and NFPA Rule 1.6 forbids working a conflict. This chapter tests the workflow — how a competent office actually records time, bills a file, takes a retainer, and runs a conflict check so those rules have somewhere to live.

Billable time, non-billable time, and contemporaneous entries

Billable time is legal work performed on a client matter that the engagement agreement allows the firm to invoice: research, drafting, interviews, document review, court runs the attorney directed, and similar substantive work. Non-billable time is still real work — opening mail, marketing, continuing legal education (CLE), collections calls, firm administration, and some training — but it is not charged to a client. A third category, no-charge / write-off, is billable-type work the attorney decides not to send. The paralegal does not hide the time; the paralegal records it accurately and lets the attorney decide realization.

Contemporaneous timekeeping means you record the entry when you do the work, or at latest the same day, with a verb-and-object description another lawyer could defend: “Draft and revise special interrogatories to defendant (0.8).” “File review” and “attention to matter” are how bills get cut and how EC-1.2(c)–(d) items are built. Reconstructing forty hours from memory the night before invoices go out is how hours get rounded up, duplicated, or assigned to the wrong file.

Most firms bill in 0.1-hour (six-minute) increments. A four-minute call is 0.1, not 0.5. A two-hour lunch is not 2.0 of “strategy” unless strategy is what happened. Task codes — including UTBMS / LEDES codes on insurance and corporate files — classify the kind of work (discovery, pleadings, trial prep) so the invoice can be audited. Use the code that matches the work you actually did. Recoding paralegal medical-record review as attorney “legal analysis” is fraudulent billing, not a task-code shortcut.

Fee arrangements the attorney sets

The lawyer chooses and quotes the fee. Unauthorized practice of law (UPL) under EC-1.8(a) includes setting fees. A paralegal may hand over the firm’s published rate sheet, may schedule the engagement meeting, and may send the letter the lawyer already approved. A paralegal may not lock a number, “meet them in the middle,” or invent a contingent percentage at the reception desk.

Know the families so you can administer them:

Engagement letters (and, where used, written contingent-fee agreements) are the system of record for who the client is, what the scope is, how the firm is paid, how costs are treated, and how either side may end the relationship. Many jurisdictions require a writing for contingent fees. Do not open a matter, start work, or deposit money against a fee the lawyer has not set and the client has not agreed to.

Retainers: advance against fees versus earned on receipt

Retainer is a dangerously loose word. On the PCCE, classify the money.

An advance fee retainer (advance against fees) is the usual “pay $5,000 to start; we will bill against it.” It is client money until the fee is earned by doing the work. It is deposited to the client trust or Interest on Lawyers’ Trust Accounts (IOLTA) account, not the operating account. As the lawyer earns fees, the earned portion is transferred to operating under the jurisdiction’s bookkeeping and notice rules. The CMS billing module should show the trust balance, the invoices, and the transfers. A negative trust balance is a crisis, not a rounding error.

A true retainer or earned-on-receipt fee — paid solely to reserve the lawyer’s availability, and treated as earned when paid if the engagement agreement and the jurisdiction allow it — is much rarer than students assume. Unless the stem clearly says the jurisdiction and the writing treat the payment as earned on receipt, treat a “retainer to start the case” as an unearned advance.

The paralegal’s systems job: code the incoming check correctly in the billing/trust module, prepare the deposit under supervision, never park an unearned advance in operating “just until Friday,” and never set the amount of the retainer as if that were a fee quote.

Conflict checks as an office system

NFPA Rule 1.6 requires a paralegal to avoid conflicts and to disclose possible conflicts. EC-1.6(e) requires the paralegal to create and maintain an effective database of clients, matters, and parties with which the paralegal has worked, if the employer permits. That database is not a diary of gossip. It is the raw material of a conflict check.

Run a check before the matter is opened and again whenever a new party appears — an amended complaint, a third-party defendant, a newly identified insurer, a newly named driver, a newly acquired corporate affiliate. Search the CMS for legal names, trade names, also-known-as spellings, related entities, and adverse parties. A hit list goes to the supervising attorney. The paralegal does not decide the conflict is “probably waivable” and start drafting.

Reveal only sufficient non-confidential information to run the check — generally the client name and the identity of the matter (EC-1.6(f)). Do not upload the former client’s medical file or strategy memo into the new system in the name of thoroughness.

Lateral hires (and freelance / virtual paralegals) are first-day conflict problems. The new firm runs the incoming person’s prior clients, matters, and parties against the open docket. The incoming person discloses from a personal Rule 1.6 database or, if a former employer forbade an export, from memory of what that person actually worked. If there is a hit, EC-1.6(g) is a hard stop: do not work the conflicted file. “I will only Bates-stamp” is still work. If representation continues with the required written consent, implement a real Ethical Wall (no connection, no discussions or document transfer, restricted access, firm-wide education) before the person is credentialed on that matter.

Worked path

A walk-in wants a $7,500 flat-fee defense and is ready to hand the receptionist a $2,000 check. The paralegal does not quote or lock the fee. She collects names for a conflict search — the walk-in, the plaintiff, the employer, the insurer on the draft complaint — and searches the CMS. A former client is the plaintiff. She stops, gives the attorney the names and matter identities only, and does not open a file, deposit a check, or “just start a chronology.” If the attorney later accepts a non-conflicted matter on an hourly engagement with a $3,000 advance, the paralegal opens the matter, deposits the advance to trust, and records her time the same afternoon with task codes and her own timekeeper number. She does not reconstruct the week on Friday from a legal pad.