Be Wary of First-of-the-Year Requests for Rate Increases . . . The Rest of the Story

In my previous post, I left hanging the question of how a firm’s charges for fees could increase if you denied the firm’s request to raise their hourly billing rates?  In one word – promotions.

That is, the first of the year is when many associates are promoted to partners. Thus it is that although the associate who was assisting the partner on a matter may still be assisting the same partner in the same manner, he now will do so a much higher billing rate due to the fact that the associate is now a partner.

Of course, who is promoted and when are internal law firm matters that are not subject to discussion with the client, let alone client approval. And that is the way it should be. But what is subject to client discussion as well as approval is how the client’s matter is to be staffed, specifically with regard to the appropriate mix of staff.

As I have written about before in several blog posts, “inappropriate staffing” is one of the biggest billing issues I come across in my legal bill reviews. A big part of this is partners billing for things that could have been done by lower billing associates.

And it does not matter if it a very large and very complex case or a small case, the principles of appropriate staffing apply across the board. For example, lower billing associates (and even paralegals) should be doing all the “grunt” work in cases. This includes such things as the basic research and first pass review and summary of discovery documents. In fact, this is just way courts will look at when asked to sort out fee bill disputes. See, e.g., Beastie Boys v. Monster Energy Co., 112 F. Supp. 3d 31  (Dist. Court, SD New York 2015).

So, if the associate who has been working on your matter has been promoted to partner, good for her! And if the scope of the work in the matter has not changed and the newly minted partner would still be doing the same types of things she had been doing as an associate, the discussion with the firm now should be what associate will be taking her place?

If the firm balks by saying that there will be costs for a new associate to “get up to speed” in the case, the costs of doing so should be on the firm. This is because most major insurers and corporations have this firmly in their billing guidelines. (Also the CLM Model Litigation Guidelines provide that the costs for getting a new attorney up to speed in the case are on the firm.)

But even if there are no billing guidelines in place, there is still the fact that the need for changing attorneys is for the “convenience of the firm.”  That is it is for the convenience of the firm which attorneys gets fired, promoted, go on vacation, or reassigned to work on more lucrative matters. When a law firm makes decisions for its convenience rather than for the client in a matter, clients should not have to bear the costs of those decisions.

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