Even though the responsible in-house lawyer has approved a budget by a law firm handling a matter, there remains the possibility of the law firm wanting to revise the budget. Here are some ideas for analyzing budget modifications. Thoughtful budgets should state the most important assumptions grounding the budget. What…
If a legal department faces less than $500,000 of spending for the foreseeable future, covering a cluster of related legal work, it doesn’t make sense to undergo a competitive bid among law firms to handle that work. It takes time and effort to consummate a competitive bid. The outcome may…
Since most invoices from law firms are based on hourly billing rates, corporate law departments should consider studying the rates they are paying. Take the five law firms you paid the most in the past year. From each of them record the hourly billing rate of the five lawyers who…
ACCA/Serengetti’s 2004 Managing Outside Counsel Survey states (page 10 of the Executive Summary) “law firm responses to requests for competitive bids remain at a low level, an average of less than two responses for each request for proposals.” A stunning finding, from my experience. I have helped six law departments…
The Federal Deposit Insurance Corp. (FDIC) uses a “Non-Litigation/Transactional Budget Form” [FDIC 5000/26 (11-00)]. Its two pages ask firms serving the FDIC for fee rates by timekeeper, a description of the matter, and a breakout of fees and expenses by “action”. Actions include research, review, negotiation, drafting, advice & consultation,…
One of your major law firms has announced that it is merging with another firm. Your first reaction might be, “Why did I read about the merger, instead of being advised in advance?” Let that flicker die down, and consider two other questions. The first call should go to the…
The Wilmington-tsunami – the convergence initiatives that reduce the number of law firms retained by a law department, which DuPont so skillfully publicized – has an almost inevitable side effect: leaving higher cost firms. If a law department chooses to find a single firm to handle matters in an area…
The law office of Vincent DiCarlo posted a short piece entitled “how to reduce the high cost of litigation” (www.dicarlolaw.com). All the advice mows down the weeds of excess litigation costs, but a few seemed especially cutting edge. On the bugaboo of wasteful staffing, DiCarlo offers a rule of thumb:…
The problem with budgets prepared by law firms for a specific matter is that the law firm will quite commonly (and naturally) budget high. The firm gains nothing if it submits a lean budget and later has to explain why costs rose above the budget. Theoretically, in-house counsel can pry…
During a year, the total number of law firms a law department paid matters less than the concentration of its spending. If a department moves from 200 law firms to 100 law firms but distributes its spending evenly among those 100, it has missed an opportunity to improve. If the…