Consulting Work - Question About Legality

[Telefonica]

I have a quick question for you. I don't know if I'll get the right answer on a style forum, but I know that some of you are lawyers, etc., so here it goes: I work as a consultant in the renewable energy field (I'm an electrical engineer FYI). Recently, due to some complicated circumstances, work has been slowing down and for the first time in two years I have not been 100% (or greater than 100%) billable. I have asked for an overhead # to charge my non-billable hours, but was told that there is no such overhead # and that I should "spread my hours around to the various projects that we have on file, even though I have not performed any work for some of said projects." These hours will eventually be charged to, and paid for by the various clients. My question is, "Is this practice illegal, unethical, or neither?" P.S. I can't edit the poll, and I know that I misspelled "advice"

Thanks for the help. 1/30/2010 - Update in post #11

 

[CDFS]

They made a movie about this. Only you were a young and upcoming lawyer.

 

[DNW]

Your pole failed. It's both illegal (i.e. fraud), and unethical (well, it doesn't seem right, does it?). Your company sounds shady -- I hope you haven't planned on staying there long.

 

[Thomas]

Just the fact that you're asking for opinions on this makes me believe you don't like this. I think it's unethical, myself, and probably illegal as well.

 

[MrG]

Originally Posted by DarkNWorn

Your pole failed. It's both illegal (i.e. fraud), and unethical (well, it doesn't seem right, does it?). Your company sounds shady -- I hope you haven't planned on staying there long.

Originally Posted by Thomas

Just the fact that you're asking for opinions on this makes me believe you don't like this. I think it's unethical, myself, and probably illegal as well.

+1 to both of these.

I'm not a lawyer, so I can only say this seems like it would be illegal, but I don't even see how it's even a question when it comes to ethics. You're forcing people/companies to pay for work you did not do for them; I can't think of a case where this would be even remotely acceptable.

 

[imageWIS]

Originally Posted by MrG

+1 to both of these.

I'm not a lawyer, so I can only say this seems like it would be illegal, but I don't even see how it's even a question when it comes to ethics. You're forcing people/companies to pay for work you did not do for them; I can't think of a case where this would be even remotely acceptable.

+ a trillion.

 

[milosz]

Their assumption is probably that if they had an overhead number it would come from all the projects, charging them a higher rate for billable hours, so you might as well just spread them around for the same effect.

Shady.

 

[Joffrey]

I voted unethical only. IN hindsight, it seems they're trying to pull an enron/arthur anderson

 

[Syl]

As others said, it's both illegal and unethical. Everyone spends time on the beach so there should be an overhead number for it.

 

[Harold falcon]

I don't know what jurisdiction you are in, and I don't know how your clients are billed so I can't say definitively that it is illegal. But it probably is.

As far as unethical, I am unfamiliar with the Rules of Professional Conduct for Energy Consultants so I don't know whether or not it would violate some certification or licensing you have.

It would appear you now have a choice to make.

EDIT - To cover yourself either way, you may want to submit your request for an overhead # in writing via email, and keep whatever response they give you.

 

[Telefonica]

Thanks for all of the responses. I want to give a little background information.

When I was told to do this, I flat out said "NO". I said that it was unethical and that it may also be illegal. The reason I'm asking here is because I talked to another engineer friend of mine who told me that it's unethical only and not illegal. He says that he's been asked to do this at just about every firm that he's ever worked for.

I won't say the name of the company that I work for, but we are one of the largest consulting engineering and EPC firms in the world, with over 10,000 employees and officies in over 67 countries. We are a very well respected company that is consistently ranked in the top five firms in the world in our core business areas.

Company policy is not to "spread hours" around when light. I have friends that work in other divisions that consistently charge their down time to an overhead number. The way the process is supposed to work in our company is if you have non-billable hours, you charge them to your division's overhead number. In other words, the company itself is not shady.

My supervisor told me that our division, because it is so small (~30 employees), doesn't have an overhead #. I don't know if my supervisor is "going rogue" and trying to make himself look good by increasing our percent billable, or if he honestly doesn't have an overhead # for me to charge to.

Harvey - I like your idea. I'm going to get a formal response in writing. I'll let you guys know what I get. I'll decide what to do when I get my response.