Luxury travel company Abercrombie & Kent general counsel Michael Ellis has insisted that his law firms give him fixed prices on legal bills. Mr Ellis is the first general counsel that A&K has employed and he has taken the opportunity to innovate. Interviewed in the GC Excellence Report, he says that coming from a private practice background he knows how the system works. ‘I’ve been able to tell law firms not to give me hourly rates. If they’re experts in their fields then they must know what something’s going to cost. I tell them to give me a fixed price that they’re not going to go over. That helps with budgeting and stops costs running away. And law firms have been amenable to being told that’s how we’re going to pay.’
Innovation
The company has also introduced technology in the shape of a billing system, which has helped keep control on costs. Ellis says: ‘You might be in a situation where at the very beginning of a piece of work you’ve agreed with a law firm $250 per day for an associate, but they charge you $280. Would you notice? Our billing system would see that immediately.’ And Ellis has taken a wide-ranging view when instructing law firms. ‘I’ve discovered that if you’re careful and you get recommendations you can find incredibly good lawyers working at specialist firms who charge a lot less.’ Indeed, some of the savings have been remarkable. ‘We were quoted $300,000 by a white-shoe US law firm to do a piece of work. Another firm quoted us $200,000. I ended up with an expert in the field who did an incredibly good job for $15,000. The GC Excellence Report 2015 was published in association with TerraLex. To obtain a copy of the Report, contact [email protected].
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