Time Billing Compliance Under the Australian Solicitors' Conduct Rules

Billing is not just an administrative function — it is a professional obligation governed by the Australian Solicitors' Conduct Rules (ASCR) and the Legal Profession Uniform Law (LPUL). Getting it wrong can result in costs assessments, disciplinary proceedings, and damage to the firm's reputation.

This guide covers the key compliance requirements that every Australian solicitor should understand when it comes to time billing.

Rule 12: Competence and Diligence in Billing

ASCR Rule 12 requires solicitors to deliver legal services competently and diligently. In the billing context, this means a solicitor cannot bill for time spent on tasks that a competent solicitor would not have needed to spend. The classic example is a senior partner billing five hours to research a basic point of law that any competent solicitor should know — this could be challenged as a breach of Rule 12 because the time was excessive relative to the complexity of the task.

The practical implication is that billing entries should reflect efficient work. If a task took longer than it should have due to the solicitor's lack of experience or preparation, the ethical approach is to write down the time rather than billing the client for the full amount.

Section 172: Itemised Bills

Under the LPUL, a client is entitled to receive an itemised bill on request. Section 172 requires that an itemised bill must contain sufficient information to allow the costs to be assessed. This means vague descriptions like "Work on matter — 2.4 hours" are not compliant. Each entry should describe what was done with enough specificity that a costs assessor can evaluate whether the time claimed was reasonable.

Good practice is to include the date, the fee earner, the time spent (in 6-minute increments), and a clear description of the work performed. Descriptions should be specific enough to stand on their own — "Reviewing and advising on plaintiff's amended statement of claim (42 pages), identifying 6 new allegations requiring response" is far better than "Reviewing documents."

Section 172(1): Fair and Reasonable Costs

Costs must be fair and reasonable having regard to the nature and complexity of the matter. The factors considered by costs assessors include the skill and specialised knowledge required, the time spent, the complexity of the issues, and whether the work was necessary for the conduct of the matter.

In practice, this means solicitors should avoid billing for unnecessary or duplicative work. If two solicitors attended a meeting where only one was needed, billing both fee earners' time may be challenged. Similarly, billing for extensive legal research on a settled point of law is unlikely to survive a costs assessment.

Cost Agreements and Disclosure

Under the LPUL, a law practice must disclose costs to a client before or as soon as practicable after being retained. This disclosure must include the basis on which costs will be calculated (hourly rate, fixed fee, etc.), the hourly rates of fee earners who may work on the matter, and an estimate of total costs if practicable.

If costs are likely to exceed a costs disclosure threshold (currently $750 in most jurisdictions), the disclosure must be in writing. Failure to make proper disclosure can affect the firm's ability to recover costs — a court may reduce costs by up to 100% if no disclosure was made.

The cost agreement should also specify how disbursements will be charged, whether GST is included or additional, and the client's right to have costs assessed.

Proportionate Billing

One of the more challenging compliance requirements is proportionality. A solicitor's costs should be proportionate to the value of the matter and the benefit to the client. Charging $50,000 in legal fees for a matter worth $30,000 is almost certainly disproportionate, regardless of how many hours were actually spent.

This principle requires solicitors to exercise judgment throughout the matter — not just at the billing stage. If a matter is escalating in cost beyond what is proportionate, the solicitor has an obligation to discuss this with the client and explore more cost-effective approaches.

Common Billing Compliance Issues

The Law Society of NSW and other state regulators have identified several common billing practices that raise compliance concerns:

• Unit creep: Rounding up small tasks to the minimum billing unit. A 30-second email should not be billed as 0.1 hours (6 minutes). While recording in 6-minute increments is standard practice, consistently rounding up trivial tasks inflates bills unreasonably.
• Block billing: Grouping multiple tasks into a single time entry ("Various work on matter — 3.6 hours"). This makes it impossible for the client or a costs assessor to evaluate whether each task was necessary and whether the time claimed was reasonable.
• Overhead charging: Billing clients for activities that are properly treated as firm overhead — filing, photocopying, internal administration, basic document formatting.
• Duplicate billing: Charging multiple clients for the same work product, or billing two fee earners for the same conference without justification.

Using Technology to Support Compliance

Technology can help solicitors maintain billing compliance in several ways. Automated time capture reduces the risk of estimated or reconstructed time entries, which are inherently less reliable than contemporaneous records. AI-powered billing tools can generate specific, detailed descriptions that satisfy the itemised bill requirements of Section 172.

However, technology does not replace professional judgment. A solicitor must still review every billing entry to ensure it reflects work that was necessary, efficiently performed, and proportionate to the matter. AI can draft the billing description, but the solicitor must take responsibility for its accuracy and fairness.

The firms that treat billing compliance as part of their quality assurance process — rather than an afterthought — tend to have fewer costs disputes, better client relationships, and stronger reputations in the market.