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Why Pay Extra for Your Law Firm’s Overhead?

Why Pay Extra for Your Law Firm’s Overhead?

Posted by Frank Steinberg | Oct 22, 2012 | 0 Comments

My firm works hard not to do things that make our clients crazy, or worse, angry.  One of the things that infuriates clients, and rightly so, is being “taken to lunch” by an attorney only to find the charge for the meal passed back to the client on the next month's bill.  It happens more frequently than you might imagine.  Here's some anecdotal evidence.  As a matter of policy my firm will not  charge a client for a meal.  Yet I have offered a number of times to pay for a client's lunch and they have refused, saying (usually with a smile) that they would rather pay it now than when my next bill comes through. Talk about being unfairly painted with a broad brush.

Here's a slightly different example.  Last week I had dinner with friends, both small businessmen, one from D.C. and one from New Hampshire.  In talking about their experiences with lawyers they have hired for business problems, both complained about the kinds of expenses that were passed through as additional charges.  One had retained a firm to handle a closing.  It charged him extra for the use of a conference room!  That was a new one on me, but they both assured me that it is not uncommon.

This brings us to this morning's Wall Street Journal, which has an article on how clients are rebelling against such law firm billing practices.  The article is hidden behind WSJ's paywall, but if you can find it, it's worth the effort.   The basic complaint is that law firms which may bill their clients as much as $800 to $1,000 per hour are also passing through to the clients the costs of overhead, from meals to photocopying to legal research services. 

For purposes of this post I want to make one point to consumers of legal services, the same one that I made to my friends at dinner.  Read the fine print of the retainer agreements, and don't agree to cost pass-through terms that are unacceptable to you.  These things usually are negotiable.  If the law firm won't negotiate them, find another law firm.  It is a rare situation in which it is critically important that you be represented by one particular firm.  There are many good firms — small, medium and large — that have reasonable billing policies.  If you don't like the terms a firm offers, try to negotiate something acceptable where you are paying for service and the firm is covering its overhead.  If the firm won't work with you, just find another firm. 

You don't have to accept behind driven crazy —  or worse, made angry — by the lawyers who are working for you.

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...

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