Law Society alerts firms over potentially misleading billing practices

by Sol Dolor02 Feb 2019

The New Zealand Law Society has alerted firms over what could be misleading billing practices.

In particular, the lawyer body warns about fees or expenses that may be included by firms under disbursements when issuing bills.

“A disbursement is a payment charged to the practice by a third party which is then on-charged to the client – such as LINZ land titles and lodgment fees,” the Law Society said. “Fees and disbursements need to be clearly separated on the bill.”

The Law Society said in a practice note that an office service fee or expense recovery is not a disbursement, making it necessary to separately disclose the items in terms of engagement. The category includes expenses that are not readily identifiable as external payments, such as internal photocopying, tolls, and faxes.

Items such as office service fees must be listed under “expense recoveries.” Lawyers and firms should avoid including external fees, such as insurance premiums and Landonline license fees, under expense recoveries because these are expected to have already been factored into a lawyer’s hourly rate, the Law Society said.