Is my real estate attorney overbilling for work on a CRE template?
I was billed for over 14 hours on a standard CRE template at $450/hr --&gt; &gt;$6K. I've read that attorneys typically take 3-4 hours to go over these leases, some even charging a flat fee. What recourse do I have?
[{"id": "g4jbjye", "text": "Ask your attorney nicely if there was something unusual in the lease review because that\u2019s significantly more hours than is typical. Then ask if she can do a fee reduction. If she says no you can always elevate to a partner but if you do be prepared to find a new attorney.", "replies": [{"id": "g4jt4n4", "text": "Ahh good ideas. Can you elaborate on what it means to elevate to a partner? ETA: she is a partner...", "replies": [{"id": "g4kd2fa", "text": "Unless she is the managing partner there is always someone above her. :-)\n\nBut hopefully if you ask nicely she will reduce it without hesitation. She should see that is insane. If nothing else works leave some online reviews or if it\u2019s a very large firm, tweet them.", "replies": [], "depth": 3}], "depth": 2}, {"id": "g6hww0n", "text": "Agree with this comment. I have been in your shoes too many times. \n\nTo eliminate this in the future, always ask for an estimate or how many hours an attorney expects to complete your project. Then put in writing that they are authorized to spend up to an amount you agree upon. Should they require more time or expense, they need authorization from you in writing to proceed.\n\nAlso, be sure the attorney you hire for a project is knowledgable and experienced in that particular area of the law. You don't want to finance them researching and learning a particular area of the law when an attorney who has experience in that area could answer your questions or do the project in a fraction of the time.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g4jcw5y", "text": "Basic lease review should cost half that at most assuming there are a good number of comments. $6k for lease review is absurd. Find a new attorney.", "replies": [{"id": "g4jt2mp", "text": "The deal is done and I'm left holding the bag! Worst part about this is that I had hoped to maintain good relations with this attorney in case any shenanigans came up during the term of the lease. Now, not so much...", "replies": [], "depth": 2}, {"id": "g4jtrjt", "text": "Don\u2019t we need more information to help OP? OP provided almost zero relevant info.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g4jgf3u", "text": "$450 is excessive. Even in West Coast it is more like $250..... Probably too late.", "replies": [{"id": "g4jj2lq", "text": "I'm in a lcol  southern state and 450/hr is typical for partner level time", "replies": [{"id": "g4jk264", "text": "Why would a partner be doing a spreadsheet lease review for 14 hours??", "replies": [{"id": "g4ju8ou", "text": "I didn't catch that they were talking about a spreadsheet abstract. An attorney I use from time to time will just read the lease and give me feedback, but this would never take 14 hours of billable time.", "replies": [], "depth": 4}, {"id": "g4jukbd", "text": "Are more attorneys padding hours during COVID?...", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "g4jjssc", "text": "$450 on the West Coast is perfectly reasonable, if not on the low side.", "replies": [], "depth": 2}, {"id": "g4jmylt", "text": "As an attorney I have to respectfully disagree. $250 is low unless someone is brand new.", "replies": [], "depth": 2}, {"id": "g4jto6m", "text": "Okay and in NYC that is a pretty standard rate. $250 is a very very very low rate here.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g4jivye", "text": "I seem to spend more time with my attorney's arguing about bills than actually working.  I am literally in the process of hiring general council to deal with all the other attorney's to put an end to shit like an $800 bill for an 18 minute phone call, or the $3,000 bill for literally less than 15 minutes on the phone and then them trying to have every person in the office email me so they can run up a bill.  I literally disputed the CC bill with one I never even hired but they charged my CC which they only took to prepare the damn retainer.  During the last recession, I met with one attorney for 30 minutes but never hired them.  Over a year later I receive a bill for a few thousand dollars which was an obvious money grab by someone in a desperate situation.  They sent me a message stating I would \"never hear from them again\" once I told them to produce evidence I agreed to pay them per the FDCPA or they would be the ones paying me.   I have actually considered getting my JD just to sue the piss out of them. Speaking from over two decades in the business world, 99.999999999999% of all attorneys are absolute scum of the earth.", "replies": [{"id": "g4jtcw2", "text": "That sounds incredibly frustrating! I'm sorry you've had to go through all that bullshit. This one was friendly and cordial and sure pulled the wool over my eyes.", "replies": [], "depth": 2}, {"id": "g54i25h", "text": "What state are you getting attorneys from?  I am a california licensed attorney and i can unequivocally say that the rate most attorneys charge out here (and the rate i was billed at when i was at a law firm) are insane.  \n\nAn attorney should not be billing you without a signed representation letter from you.  I work with outside counsel in multiple states now in my role in house and the first thing we iron out is their billing practice and my expectations.  I have had to get rid of attorneys at times who tried to bill too much, and every time they slashed their legal bill on the way out. \n\nLegal services are a bit strange in the subjective and unprovable nature of them from the end user standpoint.  For example, someone comes to your house to work on your hvac you can see they were there for 2 hours and need 5 pounds of refrigerant to charge your system, bill says that, no confusion.  But an attorney can purportedly spend 16 hours reviewing your lease.  How do you prove that?  Maybe their version of reviewing is simply reading.  Maybe they took 16 hours because they just started practicing commercial law and dont understand it.  Maybe they had a brand new first year associate do the work and then they had to review to see if the associate knows what to do and you are basically paying for training.  Maybe they just said its a 48 page document, i read at .33 hours a page.  Instant bill.\n\nFor me personally, litigation i would pay hourly, but transactional items (like review or create a lease) i would be asking the attorney for a flat fee and i dont like the fee i would walk.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g4jk1tf", "text": "I\u2019d start with asking for a billed hour itemization. This should be something readily available. Once you have this, then you can start negotiations.", "replies": [], "depth": 1}, {"id": "g4jq38r", "text": "Do you have an itemized bill?\n\nThe whole \"but it's a standard lease\" objection has less traction than all that. I don't think that I've made it through a lease negotiation without someone trying to argue for something's inclusion based on it being customary. The length of the time in terms of review is part to do with the lease, but equally to do with the property, the parties, and other deal-specific matters. So I'm not balking at that figure, but it does seem on the high side, and region and all that will change things making it hard to judge over the internet.\n\nThere are also attorneys who use the medical billing model and operate with the assumption that there is going to be some sort of pushback on it, which is why asking for the itemized one is relevant. This should give you a much better sense of the bullshit level of the billing, if any.", "replies": [{"id": "g4juhic", "text": "Yes, I did get an itemization.\n\nHere's the breakdown \\[my comments in brackets\\]:\n\nRead and respond to email about whether lease negotiations are starting yet \\[2 sentences\\]: 0.20\n\nReview/analyze LOI and draft lease. Telephone call with client \\[47m 20s\\]: 2.40\n\nReview/analyze draft lease; email to client with comments/revision: 3.80\n\nWork on lease revisions; email correspondence with client: 1.40\n\nReview/analyze correspondence. Telephone call with client \\[31m 4s\\]. Continue to work on lease revisions: 3.50\n\nFinalize lease revisions and fwd to client: 2.00\n\nEmail correspondence to and from client. \\[made minor edit to start date\\]: 0.30\n\nReview and check final lease. Forward to client: 0.50\n\nGrand total: 14.1 hours\n\nPlease help me make sense of this...\n\nETA: I strongly feel that much of the \"review\" and \"finalizing\" had to do with word processing. How do we hold attorneys accountable for this? If one person types 90 wpm, and another 40 wpm, does the latter get to bill for more time?...\n\nAlso, much of this was WFH during COVID. So, I'm not sure if some tasks would have otherwise been delegated to paralegal or other staff.", "replies": [{"id": "g4l8nir", "text": "This itemization is obviously padded unless there are unusual circumstances or something funky about the lease. I once negotiated a fee reduction when I was billed four hours so the attorney could become familiar with a topic they weren\u2019t fully experienced with. My argument was that it wasn\u2019t my responsibility to pay for their lack of expertise.", "replies": [{"id": "g4lj9ll", "text": "Oh wow, that's a good strategy. I'm glad you were able to negotiate a fee reduction. I'm trying to do the same at the moment. However, I feel I'm going nowhere fast. After stating that I felt this number was unusually high, she countered that we were lucky the landlord didn't push back at all; otherwise, she would have billed for even more hours!", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4jtihy", "text": "OP, can you please answer the following:\n\n1. Where is the situs?\n2. Does your attorney specialize in CRE?\n3. Did you sign an engagement letter?\n4. Did you pay a retainer?\n5. Did the attorney give you an estimate?\n6. Is your attorney ONLY negotiating the lease and doing zero due diligence? Nothing else. Just the lease.\n7. Does the lease contain any riders? Did your attorney prepare any?\n8. Can you describe the property you will lease?\n9.  Any special conditions or issues with this property?\n\n-\n\nOP, you provided almost zero relevant information in the OP. In my state, a commercial lease and everything connected therewith, can easily take 10-15 hours, if not more. It depends on the specifics in the transaction. Also, just because the template is standard isn\u2019t enough information. Where I practice, it is the riders take the real time to negotiate/draft (this is in reference to just the lease).", "replies": [], "depth": 1}, {"id": "g4kkxys", "text": "I don't know how you guys keep saying $450/hr is low.  I'm working with a land use attorney here on long island right now for one of my properties. Works at a pretty big prestigious shop. Once I retained him, he's been billing me $250/hr.", "replies": [], "depth": 1}, {"id": "g4plwcu", "text": "Commercial RE attorney here\n\nHard to weigh in on the 250/hr. Billing rate is very dependent on your geographic area. I am in the Midwest area, so that is reasonable. That being said, thats probably basement level rate for a big city on West Coast or biglaw in DC or whatever.\n\nI see they sent an itemized billing statement. I mean, its hard to tell, but they do have exact figures for phone calls, so that is good. Its extremely hard to tell whether they padded the bill or not because it depends on the complexity of the lease. I think 14 hours is quite a bit of time if its a very basic lease, but again, if this was a 50 page lease + additional riders/addendum and a long back and forth between LL and TT, it might not be enough time.\n\nMy advice: reach out to counsel. Tell them you were expecting to pay more in the range of \"$XX\" If they say, that's just not possible or they could never do it that cheap, fine. I'd pay the bill and let them know you'll find other counsel moving forward. Then, shop around and ask what a standard rate would be for reviewing a commercial lease. Most firms, at least in my area, would be willing to sit down a local business owner for a few minutes to give them a breakdown on rates, billing, etc.", "replies": [{"id": "g4u1sen", "text": "Thanks for your input. I'm located in a major coastal city in CA, so the rate was what I was expecting. The lease was based on a template with a few addenda/riders added in. There was no back and forth at all with the landlord. \n\nI followed the advice of this thread and reached out to my counsel, thanking her for her work but expressing my concern over the billed hours. I had previously consulted with another area attorney who said that these things normally take about 3-4 hours and I shared that information. Got an email back defending the quality of her work (never in question) and offering a 10% discount. \n\nI think this is the best I can do and will probably just leave it there. \n\nAny advice on obtaining more transparency from the getgo in the future? Is it standard to ask for a cost estimate, cap hours, have a flat fee arrangement, etc? Would like to avoid the extreme sticker shock again.", "replies": [{"id": "g9isbbe", "text": "It sounds like you are already aware of this but my mother is a RE attorney and focuses the majority of her work on lease negotiations. She says you were grossly overcharged for merely putting a lease template together... Best of luck in the future!", "replies": [{"id": "gq4jejx", "text": "My mommy is a lawyer!", "replies": [{"id": "gq4qipa", "text": "LOL okay weird guy who is going thru my comment history.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]