QUESTION: Dear Rabbi, I recently read an intriguing study published in the Journal of Experimental Psychology (January 30, 2024), which found that in some situations, people may actually lie to seem more honest—even if it means losing money. For instance, lawyers who logged exceptionally long hours would sometimes report fewer billable hours so their clients wouldn't think they were being overcharged. Is this a permissible practice?
ANSWER: Before I respond, it is important to understand how law firm billing works. The lawyer bills the client at a certain hourly rate, but the lawyer himself typically only receives a fraction of that as his salary or draw. The law firm keeps the rest to cover overhead — rent, staff, malpractice insurance, administrative costs — and profit for the partners.
The arrangement, however, varies by firm structure. At a large firm, an associate might bill $500–$1,000 an hour but take home a straight salary of perhaps $200,000–$400,000 a year, while the firm collects the full billing amount. Partners typically receive a share of the firm's profits on top of or instead of a straight salary, so they benefit more directly from high billings.
Accordingly, if a lawyer were to underreport his billable hours, this lie reduces the law firm’s income and affects all of the employees monetarily. The governing principle, therefore, as told to me by Rav Dovid Cohen Shlita, is that falsifying billing records — whether by inflating or deflating hours — constitutes lying in a monetary matter, which Halachically renders the person a thief (Gazlan). It does not matter that the falsification in this case benefits the client financially. The Torah prohibition of Midvar Sheker Tirchak — "Distance yourself from falsehood" (Shemos 23:7) applies to the act of creating a false record, regardless of which direction the money flows.
The Halachic irony here is the very motive the researchers identified — lying specifically in order to protect one's reputation for honesty. Rav Nachum Yavrov ZT”L in his Niv Sfasayim (Vol. II, #5 and #6) establishes a fundamental principle: He writes that the well-known dispensation of Mutar Leshanos Mipnei HaShalom — that one is permitted to deviate from the truth for the sake of peace or to avoid harm — is available only to a person who is genuinely committed to a life of everyday Emes. As the Gemara in Yevamos 65b states, and as Rav Yavrov elaborates, if it is a person's habit to calculate when to lie, even for ostensibly good reasons, the leniency does not apply to them at all. The Gemara in Yevamos 63a reinforces this: Rav warned his son Rav Chiya that even a technically permissible deviation from truth, practiced habitually, leads one down the path of "They have taught their tongue to speak lies." (Yirmiyahu 9:4).
This creates a devastating paradox for the people in the study. The lawyers who underreport their billing are lying strategically to manage their reputation for honesty — which means they are likely viewed by Rav Yavrov as people who calculate when to lie. That very habit is precisely what, according to Rav Yavrov, disqualifies a person from the leniency of lying for the sake of peace which the lawyers could have potentially invoked – i.e., I will underreport my hours to keep the peace and not be humiliated, called a liar, etc. They are, in effect, spending the only currency that could have protected them.
However, not all Halachic authorities agree with Rav Yavrov. Some believe that one is permitted to invoke the leniency of lying to keep the peace even if one is not necessarily committed to a life of everyday Emes. According to those authorities, in a case where one works for himself and therefore no one other than himself would be hurt monetarily by the underreporting of billable hours, it may be a permissible practice to lie and underreport hours to keep the peace as outlined above.
