Court Zingers in Legal Billing Cases

July 21, 2016

Over the years, I have read hundreds of cases from throughout the U.S. involving fee billing issues.  From these cases, I have extracted key holdings that I often rely on in making decisions on whether certain billing entries should be reduced or eliminated.

As with most all cases, the holdings in cases on fee billing issues are often very dry. And just like in other cases, courts in fee billing cases sometime get in a good dig or have a pithy way of putting across their point or sending a clear signal to the attorneys seeking approval of their fees that they are on to their games.

Here are some examples. Read the rest of this entry »

Soaring Out of Sight: Billing Rates Climb To $2,000 an Hour at Some BIG Law Firms

June 22, 2016

story in the February 9 Wall Street Journal reported that billing rates at some BIG law firms had risen $1,500 an hour despite weak demand and low inflation. Now, according to a study published in May by BTI Consulting Group, the top rate at some BIG law firms has risen to $2,000 an hour.

It seem like it was only yesterday (actually it was 5 years ago) that I posted two pieces on lawyers at BIG law firms that were charging $1,000 an hour. In one blog post, I wondered why it was that some corporations were willing to pay such high hourly rates when very good lawyers at much lower billing rates were readily available.

I answered that question in a follow-up blog post when I reported that an expert who regularly consults with big corporations told me that big corporations actually view lower billing rates at a firm as a negative. 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. For more insight on this issue, you might want to read my blog post entitled “Why Corporate Lawyers are From Mars and Claims Managers are From Earth.”

Of course, as I have warned many times in the past in this blog, BIG law firms and overbilling go hand-in-hand. This is why  in a post entitled “Getting Caught up in BIG Law Firm’s Protocol,” I warned against ever, ever, ever hiring a BIG law firm to do what a smaller law firm can also do. This is because my experience has taught me that BIG law firms are  the worst of the worst when it comes to overbilling clients.

Over the years, I have reviewed legal bills from thousands of law firms throughout the U.S. involving every type of legal matter imaginable. Invariably whenever I have reviewed legal bills from BIG law firms, the results are the same. BIG law firms always overstaff, overwork, overbill, and most importantly, they tend to overlook any real opportunities to quickly and efficiently resolve a matter for a client.

And I am not the only one who believes this. I have heard this time and again from other lawyers – especially those lawyers who have taken on clients that were the subject of abusive billing by BIG law firms. To illustrate my point, in a recent post on a state bar listserve I belong to an attorney was seeking help for a potential client who had left a very large law firm because he was tired of being overbilled by multiple attorneys who were doing the same work and not getting anywhere.

So if you have a friend who is thinking about hiring a BIG law firm – no matter how big or serious the matter is – don’t let her do it! Warn her that she is likely not only letting herself in for overstaffing and overbilling, but very likely for an unsatisfactory result as well.


If you have questions on legal bills from BIG law firms, please feel free to contact me for answers at Dealing with BIG law firm invoices is my specialty. 

Using “Rules of Thumb” and Common Sense in Reviewing for the Reasonableness of Time Billed

June 7, 2016

As I stated in my previous post, the three issues to consider in reviewing any billing entry are the reasonableness of the task, the reasonableness of the person performing the task, and the reasonableness of the time billed for performing the task. Of these three issues, the issue of the reasonableness of the time billed is the more difficult of the three.

Unlike coming up with a list of non-billable “tasks,” coming up with a “list” of how long it should take to do things is difficult to do. But while it may be difficult to do, it is not impossible to use some basic “rules of thumb”  in reviewing billing entries for the reasonable of the time billed – especially if you also use some basic common sense.

Below are a few of the rules of thumb I use. Read the rest of this entry »

Following The Three “R’s” of Legal Bill Review

March 23, 2016

Reviewing entries in a legal bill involves more than reviewing those entries for compliance with a company’s litigation and billing guidelines. It also involves reviewing the entries for ”reasonableness” as that term has been defined by the ABA Rules of Prof. Conduct and well settled case law.

Reviewing legal bill entries for reasonableness always involves reviewing for three things:

  • The reasonableness of the “task” performed
  • The reasonableness of the ”person” performing the task
  • The reasonableness of the ”time” spent performing the task

In my seminars on How to Review Legal Bills Like a Pro©, I often ask participants what do they look for first when they review a legal bill. Many times the answer back is they look first at the time billed for the tasks. However, that is the last thing that should be looked at when reviewing a legal bill.

To properly review a legal bill (and save time), it is important to follow a disciplined 3-step approach. Read the rest of this entry »

What Insurers Can learn From General Electric’s Jack Welch About Lowering Outside Legal Costs

January 27, 2016

Back when he was running GE, Jack Welch famously argued that leaders should fire the bottom 10 percent of their workforce each year. He believed that doing so was a necessary part of an orderly continuous improvement process.

So, as a part of your own continuous improvement process, you should fire the 10 percent bottom of your workforce. Right?  Okay, maybe your HR Department will not let you do that. Besides, that probably would not do much to lower your outside legal costs. But what you can do (today, even) to lower your outside legal costs is to fire the bottom 10 percent of your outside counsel. Read the rest of this entry »

What Exactly Is a “Hybrid” Legal Bill Review Program And Could It Be Right for Your Company?

January 20, 2016

In consulting work I do through my role as a CLM Advisor, I work with many small to mid-sized insurers on how to better control their outside legal costs. Invariably, this includes a discussion about the various approaches the insurer can take to legal bill review.

The primary approaches to legal bill review an insurer can take are training the claims staff to do bill reviews, establishing an internal bill review unit, or outsourcing the bill reviews.  Each approach to bill review is separate and distinct and I try to work with an insurer to carefully identify the pros and cons of each approach in order to determine which approach is correct for their situation.

But in addition to the three main approaches to legal bill reviews, there is often a fourth or hybrid approach that can be taken. This hybrid approach is one in which most of the legal bill review is done in-house, but some of it is outsourced. Read the rest of this entry »

How Flat Fee Billing Savings on Legal Fees Can Evaporate When Other Factors Are Considered

January 6, 2016

“When fully paid beforehand, you are more than a common mortal if you can feel the same interest in the case, as if something was still in prospect for you, as well as for your client. And when you lack interest in the case the job will very likely lack skill and diligence in the performance.” A. Lincoln

In looking back at prior posts for the past couple of years, I see that I made some promises to follow-up on some posts with some additional information or insight. So a part of my New Year’s resolutions for 2016 will be to make good on these promises. And to get a start on this resolution, I will follow-up a prior post on Alternative Fee Agreements (AFA) entitled “Alternative Fee Agreement Savings: Real or Illusory?”

In my prior post on AFA, I wrote that the articles on the successes of AFA tend to state success in a conclusory fashion and offer few, if any, details on how that success is measured. As I noted, I am left to wonder if the insurer or corporation using the AFA “actually reduced legal costs by some degree, are they still paying too much for legal expenses? (If not, how do they know this?)” Also with regard to insurers with flat fee agreements for litigated files, I wanted to know “how did the flat fee agreements affect cycle times or indemnity results?” Read the rest of this entry »