Big bills meet tough client scrutiny

By Megan Malloy

23 October 2012 at 11:22 BST

Companies are running an ever-keener eye over long legal bills as corporate clients are less willing to bankroll overhead costs and extras such as car services, meals and photocopies, a report on US business attitudes indicates.

Extra cheese, but will the client pay?

According to the Wall Street Journal, while some costs might seem miniscule compared to hourly partnership rates of $800 to $1,000, the costs pile up and amount to millions of dollars annually.
As a result, clients are increasingly laying down hard rules to law firms at the start of instructions, for example, stipulating that they will only pay half a lawyer’s hourly rate for travel time or refusing to cough up for first class flights.

Curbing costs

Legal sector consultancy Mattern & Associates polled 64 law firms and found that 69 per cent had clients that refused to pay for legal research altogether. Medical sector giant Johnson & Johnson is one of the many companies attempting to curb legal fees by requiring law firms to use their own subscriptions to legal databases such as Westlaw and LexisNexis while doing work for the company.
Charging clients for the cost of overhead has largely gone unchallenged in the past according to David Paige, a legal-fee consultant and managing director at Sterling Analytics Group. ‘Ten to 15 years ago there were only a couple of corporations that took this seriously. Legal bills were considered untouchable.’


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