For more than a decade, the Queensland Law Society Ethics and Practice Centre has guided or counselled members in making daily ethical decisions.
During this time, Stafford Shepherd has become known to many as the Principal Ethics Solicitor. He has recently recorded a series of The Callover podcasts along with host Georgia Athanasellis.
The first episode focuses on billing. As Georgia says: “Billing is not just a financial practice, but a critical component of maintaining clients trust and upholding ethical standards in the legal profession. So today, we’ll explore the ethical obligations and professional standards that govern what types of work can and can’t be billed. How to draft clear and accurate invoices and the importance of compliance with the Legal Profession Act.”
But before launching into the fundamentals of billing, Georgia asked Stafford what initially sparked his interest in legal ethics.
“That’s very hard to say, Georgia, to be quite frank. I undertook a Masters at the University of Queensland many years ago now, and as part of that component, I undertook a study of commercial equity, which leads to the wider area of ethics.
“And it felt correct for me about 17 years ago to join the Society in a means by which I could bring back to the profession much I took from it, which was giving guidance and support to the members of our profession whether they’re young or old. It’s been a love for me in many ways because I’ve been able to use my understanding of equitable principles, which are underlined by ethics, to shape and develop, hopefully, the consciences of many of our members.”
And so what’s involved in being the principal ethics solicitor at the QLS?
“Having a chat with people. It’s always been that and always will be.”
I imagine in that role, you’ve worked extensively with lawyers from across various stages of their career. What strategies or support, do you offer to help practitioners comply with their ethical duties?
“The very first question we must always ask ourselves is ‘who we are representing, who our client is’, because that will shape those the journey we take with the person. And secondly, the questions we must ask ourselves, if we don’t correctly identify who are acting for whether it be the general manager of a company, or the company, a trustee or a beneficiary, a mum or a dad, or both, the outcomes of that question will shape how you answer everything else.
“Even yesterday, when I was on the phone, one of the very first questions I ask most practitioners is about who they represent, because that is the very essence of the questions we must shape as we go forward in our analysis of the issue.”
Can you provide me with a brief summary of the legal and ethical framework that governs lawyers billing practice and legal costs?
“Well, billing begins at the very first stage when you meet a client. Billing is critical to ensuring that business operates at a profitable level. But I think we need to remember that we are a different profession to every other profession that we have in Australia. The common law has always implied into our relationship that our bills will be fair and reasonable.
“It uses the word ‘costs’, and that’s been reinforced by the Legal Profession Act of 2007. The first stage is ensuring the client is comfortable with you, that you understand the client problem, and that you can give value to the client by the skills that you have. In doing so, you must communicate with the client in a clear and considered manner.
“The way that you bill, what you bill, how you bill is a matter for yourselves. Many people use time costing, which is a matter since that which we’ve utilised since the 1980s. For myself, we always use task-based billing, which is essentially, replicated in the rules for the various courts. A task-based billing was the norm at one point in time.
“But whatever we do, we must ensure that we give sufficient information not only to comply with our legislative obligation under the Legal Profession Act, but also our ethical obligations to ensure that whatever we do is both fair and reasonable. No other profession, none, nobody else apart from us has that implied and now statutory obligation. And that’s because, notwithstanding that there are competitors out there, we still remain a monopoly.
“We have the right to appear before courts based on our admission practising certificate. We have the right to represent people as an agent, as a voice. No other profession has said opportunity. And that’s why the common law always was jealous to protect the ultimate receiver of those benefits. That is, the client.”
What are the most common misconceptions legal practitioners have about billing practices?
“I think they believe that we can bill anything, which is not the position. We can only build the services we provide. What that service is depends on the nature of the retainer. For instance, most days these days in conveyancing, you will have a lump sum, and that will mean everything within the terms of the file, unless the retainer otherwise provides for differences.
“Now I know, for instance, that some solicitors now charge if statements are delayed for the different time units, but that’s not clearly articulated to the client in the disclosure … It’s about being open, honest, fair and reasonable.”
In terms of billing practices, what trends or changes in billing practices do you see emerging in Queensland or across Australia?
“Billing has changed enormously since the 1980s. So, I remember an old decision called re Morris Fletcher and Cross, which was heard by Justice Fryberg, in that billing by time units was considered novel and had been failed to be explained to a client, a commercial client at that time, in a manner which was to be both fair and reasonable.
“Different solicitors have different practices these days. Some wish to ensure that the client has a complete understanding of the costs that they will have. They provide an upfront lump sum figure. Others still utilise the unit of time. Some have reverted to the task space; others have an amalgam. There’s nothing the Act dictates to us as to the means by which we reach those costs, other than to say it must be fair, reasonable. So billing practices in Queensland have a variety of outcomes, depending on the firm, how they view themselves and what they are attempting to do.”
And looking to the future, do you think, technology will influence our billing practices? And do you think practitioners ought to take steps to adapt to use technology too?
“Oh, we should all be using technology. I’m a Luddite, so I’m not the best person to speak about these sorts of things, but yes. If you’re asking me whether artificial intelligence is going to be an important factor for the future, I think it will be. What we have to understand is artificial intelligence does not have the empathy that we as humans have.
“Can we utilise it? I’m not exactly certain. I don’t believe that AI at this stage is a database. We still need the skill to search for the answer. That may mean looking in a textbook. It may mean going online. It may mean a better way to communicate with our clients by using the, means to see them visually, via remote access that has been one of the consequences of COVID.
“It means that regional and rural practitioners for the first time can speak with their client over distances. I’m aware that large law firms, national and international law firms are utilising video conferencing more than just picking up a telephone. It gives a humanity. So that’s the use of technology. But when we come to artificial intelligence … we need to be careful.
“Artificial intelligence, at this moment in time cannot provide the answer to the problems we’re seeking. It may help us structure an answer. And you must review and review and review because we know the outcome where we attempt to use chat, GPT, or whatever may be the device, and it gives us an answer.
“If you don’t review it and don’t satisfy yourself that it is accurately and correctly identified the authorities on which you rely, you’re not serving anybody. You’re only creating a problem. I’m not certain the answer about how you charge for artificial intelligence. There are issues about the software. There’s issues about the information received to me. At this stage, we are not at the point where we can rely on it as a means that we can certainly say to ourselves, ‘this is accurate’ for the client.”
You can now listen to this episode of The Callover now.
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