More Corporate Clients Are Challenging Law Firm Expenses

By Andrew Lu on November 15, 2012 | Last updated on March 21, 2019

Corporate counsel are scrutinizing law firm legal bills more closely than ever. Is this the end of first-class airplane tickets and meals at Michelin-starred restaurants?

There was a time when a BigLaw attorney kept receipts for every meal and every cup of coffee while on the clock. These costs were simply counted as work-related, and at month's end the attorney was automatically reimbursed for everything.

But with the economy weakening, corporate clients are increasingly reviewing every itemized expense claimed by outside counsel. And they are not necessarily happy with what they see, reports the ABA Journal.

For starters, GCs are fed up with outside counsel's excessive "soft costs." This includes such things as 25-cent photocopies and overly expensive faxes and word processing services, reports the Journal.

Other expenses raising the ire of corporate clients include meals, drinks, and first-class travel. Of course, that's on top of shelling out $800 to $1,000 an hour for legal services.

While scrutinizing these costs does make sense, many clients are also balking at paying research costs. In fact, a survey found that 80 percent of law firms had clients who complained about research costs.

But legal research is distinguishable from, say, charging a client for $100-a-plate sushi. Without solid research supporting a decision, corporate clients can be exposed to all sorts of liability.

It is true that some associates may sink hours into researching every nook and cranny of a legal issue. However, it does seem problematic when a client, especially a lawyer, starts to tell another lawyer that he's researching too much. By contrast, it's much less of a problem to tell a lawyer that he's eating too much like a king.

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