When the fee agreement process does not apply, a representative can charge and receive a fee only upon authorization of the Commissioner. Before 1991, the fee petition process was the norm. Now the fee petition process is the exception to the rule. 42 U.S.C. § 406(a)(1) describes the exception to the rule. The fee petition process applies whenever the fee agreement process does not with limited exceptions. HALLEX I-1-2-51. The fee petition process is set out in the regulations. See, 20 C.F.R. §§ 404.1720 and 416.1520. Subsections (b) and (c) of those two sections both provide for the petition, decision, and review process. This raises the question of the parameters of agency discretion in setting fees.
May a Representative Charge for Travel Time?
A question arises whether a representative may legitimately bill for time associated with travel or waiting at the hearing office for the agency to call the matter. The agency has no published policy or statement about billing for travel time. “A lawyer’s time and advice are his stock in trade.” Abraham Lincoln.
The American Bar Association discussed billing practices for fees, disbursement, and other expenses. ABA Formal Opinion 93-379 (December 6, 1993). The Formal Opinion posits examples of a lawyer appearing on three matters on the same day in the same courthouse; flying cross-country for a deposition on a matter and simultaneously working on a brief for another client; and using research conducted for one client to the benefit of representation of another client. The Formal Opinion quotes the comment to Model Rule 1.2 to the effect that the scope of services may be limited by agreement. The Formal Opinion then answers the three questions: a lawyer appearing on three cases may not bill for all the time associated with travel and attendance to all three clients; a lawyer may not bill for travel and preparation of a motion;[ii] and use of recycled pleadings does not permit billing again for the same time spent in the past.
If Abraham Lincoln made a correct statement about a lawyer’s time and the client has retained a representative to handle a claim that requires travel, then travel time is compensable. The ABA Formal Opinion assumes without discussion that travel time is compensable just cautions against double billing for the time. Ethics and Time-Based Billing cites to the ABA Formal Opinion for the proposition that a lawyer may only bill for the time actually spent. Michael Downey, Ethics of Time-Based Billing, Law Practice Today (ABA Law Practice Management Section 2006).[iii]
A representative can and should charge for reasonable travel time associated with representation of a claimant. Claimants have an interest in retaining the representative of his/her choice without regard to the agency's ability to constrain that choice by depriving that person of the liberty to compensate the representative for all the time associated with that representation. No ethical limitation exists to preclude the claimant form making that choice or from the representative to request compensation for the time expended.
This takes on greater importance where the claimant and the representative never contemplate compensation for any particular allotment of time. The claimant contracts with the representative to compensate out of a specific percentage of past due benefits. While the amount of time expended constitutes a regulatory factor, that regulatory factor is never dispositive of the eight factors listed.[iv]