It is easy to reduce litigation costs without sacrificing quality or compromising results. Most corporations could cut their litigation costs in half without adversely impacting the outcome of any of their litigation matters. This article will specifically identify and address several areas where billing excesses occur on a regular and ongoing basis.
1. Outside counsel should be required periodically to submit a proposed cost budget. While it may be difficult to predict with certainty, it is paramount that cost be considered at all times. It is the client's decision whether certain work proposed is worth the cost.
When setting forth an anticipated budget, outside counsel should include detailed estimates for all legal work including document discovery, court appearances, motions, depositions, experts and other disbursements. Each subsequent report should indicate if outside counsel is within budget or if budget modifications or changes need to be made, and if so, why. Such a requirement focuses outside attorneys on the issue of client cost while keeping in-house counsel informed along the way.
2. Rarely is there a need for more than one attorney to be present at court conferences or depositions. It is usually an unnecessary expense for a law firm to send two, three and sometimes more attorneys to argue a motion or attend a conference. Why clients tolerate such excesses is inexplicable. With competent attorneys, you should be able to safely reduce the numbers of attorneys working your files.
3. Motions should not be made without the permission of in-house counsel. Most motions are unnecessary and almost all are absurdly long and costly. Litigators should make every attempt to resolve issues by letter or phone call. Only if the court advises the attorneys that a motion is necessary to resolve an issue should one be made. Outside attorneys should justify to the client why the motion is important to be made, the merits of their position, the chances for prevailing and the anticipated cost.
4. Depositions are another area rife with abuse. Far too many are done for no real reason and at great expense to the client. Depositions costs add up with preparation time, travel, transcription andsubsequent review. Instead of automatically deposing everyone under the sun, your attorneys should try to get a signed witness statement. It's easier, better, more effective and often achieved at a fraction of the cost. Only truly material witnesses should be deposed.
5. Limit the number of intra-office conferences your attorneys bill.
6. Legal research requiring more than 10 hours on any one issue should be approved in advance. Verify that your attorneys are not outsourcing their research or other legal work to India at $12 per hour and then billing you at their hourly rate as if they had done the work.
7. Agree in advance on reasonable rates for partners, associates, paralegals, etc. There is simply no need to pay more than $400-500 per hour to obtain top-notch legal talent and considerably less for quality associates.
8. Decide up front how often you want to be billed and the format of the bill. Requiring your outside firms to use your format allows you to more easily compare bills from case to case and from firm to firm.
9. Bills need to be periodically checked to see that you are paying reasonable rates for faxing, copying and computer charges.
10.The goal of reporting should be to provide the client with facts, observations and opinions on how best to bring the litigation to a successful conclusion. Most firms send overly long reports containing irrelevant information imparting very little helpful knowledge to general counsel. Reports should be short, to the point and address the client's goals.
Corporations should look to themselves when confronted with runaway ligation costs. In general, it is our experience that corporations are grossly overpaying on an hourly basis as well as paying far too many attorneys to work on their cases. Much of the work being paid for is unnecessary and unrelated to the ultimate result. There are many firms out there, including ours, that are litigating significant cases all over the country for far less cost than many corporations are currently paying. The market is increasingly unlikely to tolerate unnecessary and abusive legal bills.
Corporations talk about cost reduction but don't recognize or appreciate it when it's offered to them. With the suggestions proposed here, most responsible corporate counsel can quicky and easily reduce their litigation budget without compromising the quality of services or sacrificing results.
Published March 31, 2009.