Billing Guidelines Need to Take Full Advantage of Vastly Overcrowded Legal Profession

Most company billing guidelines cover the usual things – no block billing, no vague descriptions, 10 cents for photocopies, etc. All too often because of an irrational fear of not being able to attract qualified attorneys to do their work, company billing guidelines stop short of including things that should be included from a cost savings standpoint.

Below are but a few examples of guidelines that could easily save hundreds of dollars per file.

Do Not Pay More Than .1 Hour for Preparing All Forms Necessary to Acquire Medical Records.

It may take up to 5 different forms plus a cover letter to obtain medical records from a provider of medical services or drugs.  And because they are all forms, they can all be completed in 5 minutes time or less. Viewing acquiring medical records from one medical provider as one discrete task, why pay .5 hour for something that can be done in less than .1 hour?

Do Not Pay for File Reviews for Status.

Billing guidelines should specify that a company will  not pay for any file reviews for “status.” Here’s why. “Review of file for status” is usually code for checking to see if a subordinate attorney, a paralegal or a secretary has completed certain assigned tasks.  As such, this “review” is considered a “supervisory” task and non-billable office overhead. Citations omitted.

Also checking for status on non-assigned work tasks (such as checking a file to see if the plaintiff has sent in their discovery answers) is something an attorney can easily assign his secretary to do.  This is because one does not have to be an attorney to check on file status which should tie in with billing guidelines that provide a company will only pay attorneys for “professional services” (i.e., only those services that require the skill or the acumen of an attorney).

Do Not Pay for In-house Photocopies.

Most company guidelines will pay 10 cents per page for in-house photocopies. While 10 cents per copy may seem a small amount, I can assure you that most law firms’ true copy costs are in the 3 to 4 cents per page range. As photocopying can be a “profit center” in some law firms, where is the incentive to not make a paper copy of everything that comes into a firm electronically?

If you think that eliminating paying for in-house photocopies will drive firms away, think again.  I currently work with three companies that do not pay for in-house photocopies and I can assure you that they literally have firms begging to do their work.

Do Not Pay for Travel Time.

Last year, I helped a company revise its billing guidelines.  When I asked how much they wanted to pay an attorney for travel time,  I was told “0.” They said that for the past 60 years they have never paid for travel time and never will.  Nevertheless, despite the fact that the company does not pay for travel time, the company has never had a shortage of qualified attorneys lined up to do their work.  Also, I can recall that when I worked in-house as a litigation manager that one of our panel firms proposed to take on cases anywhere in the state without charging travel time.

One of the chief reasons why attorneys would be billing to not be compensated for travel time or for reviewing a file for status or for in-house photocopies or other things is the fact that the law profession is not just overcrowded, it is vastly overcrowded.  As such, if some firms balk at certain changes in a company’s billing guidelines, there are literally dozens of other well qualified firms eager to take their place in all but the smallest of hamlets in America (and why would you want to hire lawyers in small hamlets?).

Sadly for the legal profession, it is truly a “buyer’s market” when it comes to procuring legal services today in all practice areas from family law to insurance defense and in every other practice area in between.  Thus, companies truly need not be hesitant to include whatever they want from a cost savings standpoint in their billing guidelines. This can be done without fear that certain changes in guidelines a company will make it hard to find qualified attorneys who will want to do a company’s work. The reality is that this is an unrealistic fear in today’s vastly overcrowded legal market.

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     Are your company billing guidelines compatible with an attorney’s ethical responsibilities under the American Bar Assn. Rules of Prof. Responsibility? If not or you don’t know for sure, please feel free to contact me for an analysis at jconlon@legalpointsllc.com.

 

 

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