How to Avoid Getting Caught Up in a Law Firm’s Protocol

Some time ago, I had a doctor come to me for help sorting out a large legal bill he had incurred with a large law firm.  He had a Medicare billing problem and had gotten into some trouble with the feds.  Although he incurred several hundred thousand in legal fees from this law firm, the firm did little to resolve his Medicare billing problems.  So the cardiologist went to an attorney at a small firm who was able to quickly and satisfactorily the Medicare billing issues.  The total bill from the new attorney at the small firm was less than $10,000.

The problems I found with the legal bills from the firm filled a 12 page opinion letter.  But beyond the individual billing issues, it was pretty clear to me in reviewing the firm’s bills that the client had got caught up in what I would call the “protocol” of this law firm.  By “protocol” I mean the standard approach the firm likely takes to handling most any matter.

While I have found over the years that while many law firms do bill responsibly, there still are too many law firms that seem to have the same type of firm protocol or approach to handling even the smallest of matters that invariably leads to overstaffing, overworking, and overbilling. More importantly, following a standard protocol in every matter often leads to overlooking any real opportunities to quickly and efficiently resolve a matter for a client.

Of course, overstaffing, overworking, and overbilling can occur at any size of law firm. And I have seen countless examples of overworking, overbilling, and overlooking real opportunities to efficiently resolve a matter for clients at small law firms and large law firms alike. In fact, the only difference I can see between large law firms and small law firms is that the larger law firms are more likely to be more formalistic in their protocols while smaller law firms may do the same things, but on a more informal basis.

So how do clients avoid getting caught up in a law firm’s protocol (formal or informal) that can lead to overstaffing, overworking, and overbilling?   

The first thing to do is to realistically assess whether your legal matter can be best handled by a large or a smaller law firm. My advice on this subject has been the same for years: if it is the type of matter that could be handled by either a large law firm or a small law firm, always hire the smaller law firm. For one thing, the hourly rates at smaller law firms are almost always lower than hourly rates at large law firms.

But, of course, the trick here is to determine if the matter is one that could be handled by a smaller law firm as opposed to a larger law firm. On this point, my rule of thumb is that the larger and more complex the issues, the more likely it is that a larger law firm is needed.  I recently blogged about this in a post entitled “Whether a $1,000 an Hour for a Lawyer is Reasonable Depends on Whether You Need a Cadillac Escalade or a Honda Civic.” That post covered some things you should consider when deciding whether to hire a larger or smaller law firm.

But whether size law firm you decide to hire, you should not just turn the matter over to the firm and expect that your matter will be handled expeditiously and efficiently (including economically). In fact, just turning the matter over to the law firm without taking further steps is a sure way to blindly getting caught up in the law firm’s protocols which can lead to overstaffing, overworking, and overbilling.

As to what additional steps need to be taken, the three most important steps to take include agreeing on the objective(s) in the matter; 2, agreeing on steps to be taken to successfully meet the objective(s); and 3. agreeing on who in the firm will be working on the matter. In a future post, I will go over each of these steps in more detail. But for now I will just leave it that discussing (and resolving) these three issues upfront with the law firm (rather than just turning the matter blindly over to the law firm) will go a long way in ensuring that you will not get caught up in a law firm’s protocols that can lead to overstaffing, overworking, and overbilling.

A Good Tip to Save on Legal Costs & Get Better Results

Here’s a tip for small to mid-sized insurers that will not only save on legal costs, but will lead to improved indemnity results as well. I say it’s a tip for small to mid-sized insurers because it’s a tip about something that large insurers already know. And the tip is to use coordinating counsel to oversee or coordinate like or similar litigation that occurs in different jurisdictions.

Coordinating counsel are often used by larger insurers to coordinate product liability cases in which the a manufacturer’s product has led to numerous suits on the same issues in different jurisdictions.  Of course, most small to mid-sized insurers do not ordinarily insure large manufacturers. But they do get sued for coverage (some on a more frequent basis than do larger insurers!). So whether it is product liability cases or coverage cases or just about any other types of cases that are similar, but occurring in different jurisdictions, consideration should be given to hiring coordinating counsel. Continue reading

Why Use of “Blended Rates” May Actually Increase Legal Costs

For the non-business readers of this blog, “blended rates” are negotiated rates with a law firm that involve blending or averaging partner and associate hourly billing rates of a law firm.  Insurance companies are big users of blended rates.

The way blended rats work is simple. If the partner’s hourly rate is $400 an hour and the associate’s hourly rate is $300, a blended rate might be $350. But whether you can save by using blended rates in a particular case actually will depend on the type of case.  For example, if the case is complex and heavy partner involvement is anticipated, you can save on legal costs. Continue reading

COVID-19 Insurance Coverage Update

In a prior post, I predicted that “if history is any guide, policyholders may win most of the coverage cases” for COVID-19 related claims. I stated that my “prediction is based on the insurance industry’s experience in litigating various policy issues for environmental claims coverage 30 years ago.”

Apparently, I was prescient in my likening the COVID coverage claims wars to the environmental coverage claims wars. For in reading news accounts, it appears that policyholder coverage attorneys are doing their best to link COIV-19 claims to environmental claims by likening COVID-19 clean-up or property damage claims to pollution clean-up or property damage claims or COVID-19 exposure claims to exposures to asbestos fibers or exposure to toxic vapors or fumes. Continue reading

Whether a $1,000 an Hour for a Lawyer is Reasonable Depends on Whether You Need a Cadillac Escalade or a Honda Civic

“[T]he Court’s review of Sheppard Mullin’s bills suggests that the Beastie Boys opted to pay for, and received, the Cadillac Escalade, not the Honda Civic.” Beastie Boys v. Monster Energy Co., 112 F. Supp. 3d 31  (Dist. Court, SD New York 2015).

A D.C. lawyer recently asked me if I thought $1,000 an hour for a lawyer was reasonable. Being a lawyer myself, I gave him a lawyerly answer that “it depends.”

I’ve written posts before in this blog about $1,000 and even $2,000 an hour lawyers.  As I stated in one of those prior posts, an “expert” who consults on litigation management issues with corporations (who are the ones who mainly hire the $1,000 and $2,000 an hour lawyers) told me that lower rates are actually viewed as a negative by large corporations. Apparently very good $500 an hour lawyers are not looked at in the same favorable way that mediocre $1,000 lawyers are simply based upon their hourly billing rates. Continue reading

Why Insureds May Win COVID-19 Claims Coverage Cases.

Media reports are that many businesses and non-profits are looking to their insurers for “business interruption” and other coverages due to the COVID-19 pandemic. At first blush, it would appear that these claims for coverage face an uphill battle based upon what might be termed clear policy language (specially manuscripted policies notwithstanding).

But it would be premature for the insurance industry to declare victory on the coverage issues. For if history is any guide, policyholders may win most of the coverage cases.

Mr prediction is based on the insurance industry’s experience in litigating various policy issues for environmental claims coverage 30 years ago. As a former Director of Environmental Claim for two insurers during the environmental claims coverage wars, I witnessed first hand how clear and otherwise unambiguous policy language did not save the insurance industry by and large from having to provide coverage for environmental claims and their massive clean-up costs. Continue reading

It’s Deja Vu All Over Again As COVID-19 Presents Law Firms With Same Financial Issues Faced During The Great Recession

With almost daily report of law firm layoffs and/or reductions in compensation, it looks like the COVIS-19 pandemic is going to have the same effect on the financial health of the legal industry as did the Great Recession in 2007-2009.  And if what happened in the Great Recession is any indicator, law firm clients will need to scrutinize more closely their legal bills.

One reason for closer scrutiny is because of what happened in the Great Recession with regards to staffing cuts. In the Great Recession, the support staff rather than attorneys bore the brunt of law firm cutbacks. This was because law firms were reluctant to let go of the attorney talent they worked so hard to attract and invested so much to develop. So the only other place to turn for savings in a labor intensive business is to support staff.

As I have blogged about before, cutting back support staff and increasing the ratio of attorneys to support staff will save law firms money. But, it also almost invariably means increased costs for law firm clients. Continue reading

How To Discuss Fee Bill Issues With Your Lawyer – Part IV: The Nuclear Option

[This is the fourth and final post in a series of posts on how to discuss and resolve fee bill disputes with your lawyer. If you have not done so already, it is a good idea to read the first three posts in this series.]

Invariably, whenever I write a post about a lawyer getting disciplined for an ethics violation involving fee billing, I will get emails. Mostly from individuals with comments or questions about lawyer discipline. And so it was that after my post about an lawyer who got a six month suspension for overbilling, I received emails from individuals with questions on the disciplinary process for lawyers.

Some of the most frequent questions I am asked are how to go about filing a complaint (and if a lawyer is needed to file the complaint), will the disciplinary agency get my money back or get my lawyer to answer my questions (or do whatever it is they want the lawyer to do), and can my lawyer retaliate against me (or file a suit against me for slander) if my complaint is dismissed? So with this the fourth and final post in this series, I would like to answer these questions and share the basics of filing a disciplinary complaint against a lawyer. Continue reading

How To Discuss Fee Bill Issues With Your Lawyer – Part III

[This is the third post in a series on how to discuss fee bill disputes with your lawyer. If you have not done so already, it is a good idea to read the first two posts in this series as they detail steps that should be taken before getting to the point where the additional steps outlined in the post should be considered.]

In my last post in this series, I ended with the assumption that communications with your lawyer and/or the firm’s managing partner or other partners in the firm failed to resolve the billing issues.  In this post I will discuss what additional steps may be taken to resolve the billing issues once direct communication has not worked or has broken down. Continue reading

Overbilling Lawyer Gets Support From Her Overbilled Clients

Making the rounds of legal publications last month was a story about an attorney in MA who was suspended for 6 months for overbilling her clients by 450 hours. According to the facts set out in IN RE: DOREEN ZANKOWSKI , the attorney claimed to have worked an incredible 3,893 hours in one year. This included 3,173 billable and 720 non-billable hours.

And according the Opinion, in addition to inflating her own hours, the time billed to clients by associates who worked under her was also inflated. However, there was no word in the Opinion as to what was done with the associates who were aware that their time was being inflated.

In reading the unusually long 42 page Opinion, something strange caught my eye.

[A full copy of this post is available to clients of legalbillaudit.com. To obtain a copy, please contact clientservices@legalbillaudit.com.]