Page 31 - Pierce County Lawyer - March April 2025

Practically anything that improves your legal education or
skills is generally allowed, as long as the costs are reasonable
and not "lavish or extravagant." It is expected if you travel to
London for a CLE that the traveling costs and meals will be
more than traveling to Sumner. However, adding a nonlawyer,
significant other, and/or children is not allowed as a tax
deduction. Even hotel and meals costs beyond the CLE dates
are generally not tax deductible. To meet the traveling expenses
deduction with the associated hotel expenses, you need to
do at least one session or class on the day of travel. For more
information, Google "Topic on. 511, Business travel expenses."
Advertising costs include your website, business cards,
marketing give-aways, and signage. If you pay for outdoor
signs, it depends on how you are charged. Say you pay
$5,000.00 for an outdoor sign, including those with LED
lights. The IRS wants you to list this property classification as
"Land Improvements" with a 15-year depreciation period. This
would include the cost of the permit, and any inspection fees
associated with it. If you have to pay annually for an outdoor
sign, then this is an expense.
As a law professional, when it comes to office supplies and
equipment costs, it’s important to ensure that anything you
claim is used solely for business purposes. You can’t, for
example, claim a computer as an office expense expecting a
business tax deduction if it’s also used for personal use.
The written fee agreement you sign at the outset usually sets
out the fees for various court appearances, Zoom meetings,
and other court related work. The only thing a lawyer has to
“sell” is his/her time. Normally, hearing fees include all the
time the lawyer was in the courtroom, including time waiting
for your case to be called. Most lawyers also charge for travel
to and from court, especially if your matter is being heard in
a court some distance from his/her office. Since you are not
rendering legal advice, travel is usually billed at a lower rate
than courtroom time. However, I have not been able to find out
if the client can be billed for travel time, mileage and parking.
I have read that you cannot charge the client for mileage and
claim the mileage on your tax return as what your client pays
you now becomes income. The waiting time is time you are not
able to work on other clients’ matters. Since the lawyer is there
on your behalf, and precluded from other profitable work, it is
time your client pays for. Many lawyers do schedule multiple
matters for the same court for the same day to minimize billing
for waiting time, but that is not always feasible.
I heard an interesting argument the other day between a judge
and a lawyer seeking attorney fees. One of the charges was
"attendance at hearing flat fee." The judge asked, "Explain
this to me." The lawyer said he charges a 2-hour flat fee to
every client when appearing at a hearing. The judge asked, "If
you get done in 30 minutes, do you do nothing for an hour
and a half? If not, are you double billing?" Double billing
occurs when an attorney invoices two or more clients at their
full rate for work performed during the same time frame.
The IRS doesn't care if you double or triple bill, as long as
you report this as income and pay taxes on it. On the other
hand, the WSBA says that double billing or the appearance
of it is unethical. By the way, the attorney redacted his court
appearance flat fee.
Client costs include filing fees, court costs, and expert
witness fees. Lawyers also need to be able to track and justify
advanced client costs to clients, which can be challenging.
Regarding credit card transaction fees, the Washington State
Bar Association (WSBA) permits lawyers to charge clients a
reasonable credit card convenience fee if they notify the client
in advance. The fee must be based on the actual cost of the
transaction. The WSBA considers credit card transaction fees
to be an expense that can be passed on to client, providing the
client agrees to the fee before it is charged.
Practice Tip:
Tasks vs calendaring due dates. One of the
things I learned while working for Helbert
Gelman was planning to meet due dates and
cutoff times. I look at a task as a reminder
what I needed to do to reach a due date.
Personally, the biggest challenge I have is
planning out the time needed to meet the
due date and time. Example, the reply is due
Tuesday by noon. What do I need to do to
get the reply signed and submitted? I want
to avoid delay by coordinating with the client
when can they read and sign the reply? I also
breakdown draft time, review time, making
any changes, signing, uploading, and getting
working copies submitted.
F or my next article I will write about
the joy of going solo.
David Robert Shelvey is a solo practitioner in
Sumner, WA. He is a member of the TPCBA,
the Pierce County Lawyer Magazine and CLE
Committee. He has been an attorney since 2015
and is a Master Tax Advisor at H & R Block.
He also volunteers as a president and cook for a
local nonprofit. david@rockcraft.org.
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