Do You Know What Your Outside Counsel Is Billing?
More in-house counsel are reviewing their outside counsel's legal bills, and they're not liking what they're seeing.
In the old days, you may have just taken a cursory glance and signed off on lengthy billing statements. But with the economy in an extended slump, corporate counsel are going through billing statements with a fine-toothed comb and disputing some charges -- both extravagant and not-so-extravagant, reports ABA Journal.
Here are five things you may want to pay special attention to when reviewing your outside counsel's bill:
- Fancy Hotels. If your outside counsel is flying across the country to represent you, it's reasonable that you'd pay for hotel costs. However, the attorney doesn't need to stay at the Four Seasons. There are plenty of reasonable accommodations, even for a high-priced lawyer, short of five-star hotels.
- Expensive Meals. Similar to hotels, it's reasonable that a client pay for an attorney's meals while he's on the road. However, performing legal work is not an excuse for your outside counsel to tour every Michelin-starred restaurant in the area.
- Photocopies. Copying a piece of paper does not cost $0.25 per page. Yet many firms still bill their clients this amount. Be aware of questionable pricing with photocopies, as it may indicate inflated prices for other standard services.
- Legal Research. If you're paying your outside counsel $1,000 an hour, you don't want his junior associate doing all the work. It's true that young attorneys need time to learn the field. But you shouldn't have to pay for every young lawyer's "apprenticeship," as they typically research every issue related (and oftentimes unrelated) to your case.
- Hours Billed Per Day. There are only 24 hours in a day. However, many attorneys still seem to believe they can bill more hours than that. Depending upon your case, billing 10-plus hours a day, day after day, should raise a red flag.
Remember, just because your outside counsel provides you with an excessive bill does not mean that you necessarily have to pay it. Ask them to explain questionable bills and to cut excessive expenses. They may cut costs accordingly, if they value your long-term relationship.