5 strategies to prevent runaway legal fees when being billed hourly

DLA Piper emails demonstrate need for monitoring, checkpoints

Casual emails from attorneys at DLA Piper exposed in a recent lawsuit appear to confirm some in-house counsels’ perception that large, seemingly reputable law firms are inflating their clients’ legal bills. In an email exchange with colleagues, DLA Piper attorney Christopher Tomson wrote “[DLA] has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode,” adding “That bill shall know no limits.” This one email succinctly states what many in-house counsel have come to fear: Today the business of practicing law is less about representing the best interest of their clients, and more about maintaining a law firm-centric entitlement culture of ever-growing legal fees to meet revenue targets. In damage control, DLA Piper published a statement calling the email exchange “an inexcusable attempt at humor.” Agreed, not much to laugh about here.

During the past five years corporations have been seeking greater value and cost-effectiveness from their legal departments, and as part of this have taken a much more active role in scrutinizing the fees they pay to outside law firms. Increasingly, companies are moving to alternative fee arrangements, seeking either fixed or flat fees to cover legal work over a period of time. While many report that these arrangements are working well, some types of legal work, including certain types of litigation and other matters, are difficult to forecast costs and do not fit well into these types of arrangements. In many cases companies have no choice but to default back to straight hourly billing.

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Mark Diamond

Mark Diamond, Founder & CEO of Contoural, Inc., is a regular contributor to Inside Counsel on Litigation Readiness and Records Information Management. You can e-mail...

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