Firm's Legal Tab: $43 Million, $50K to Prepare Legal Bill
The law firm billing model has taken a lot of heat of late, with companies refusing to pay for new associates and demanding alternative fee agreements.
That conversation has just been launched onto the national stage, a response to a motion filed by Madoff trustee Irving Picard and his legal team at Baker & Hostetler requesting some $43 million in legal fees and expenses for about 4 months of work.
While there is no doubt that it costs money to practice law, this latest monster legal bill is raising some important ethical questions about the current billing model.
It's undisputed that attorneys at Baker & Hostetler are engaged in hard work, already managing to recover about $7 billion for Madoff investors. But federal oversight agencies, particularly the Securities and Exchange Commission, are concerned that the firm is overbilling, reports Reuters.
In addition to requesting payment for 116,398 hours, Forbes reports that the itemized bill includes the following:
- $2,000 for photocopying
- $13,065.93 for stationary and office supplies
- $50,067 for preparing the bill itself
Important ethical questions abound.
Is overhead, such as office supplies, actually already built into legal fees, making separate charges duplicative?
Who, exactly, is making photocopies and how much is their hourly rate?
Bottom line: Is the way attorneys bill their clients ethical?
Should a client be charged for the tallying of a bill when the process is for the sole benefit of the law firm?
The answers to these questions are entirely dependent on you, your firm, and its billing practices, but they definitely raise interesting points that should, at the very least, be considered.
Related Resources:
- Latest Fee Request in Madoff Tops $43 Million (Wall Street Journal)
- Trends in Alternative Billing & Convergence, Hildebrandt Survey Says (FindLaw's Technologist)
- Madoff Victims Get $7.2 Billion from Jeffery Picower's Widow (FindLaw's Decided)