GCs Give More Scrutiny to Legal Bills, Spurring More Fee Disputes

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GCs Give More Scrutiny to Legal Bills, Spurring More Fee Disputes

Posted Aug 13, 2008, 05:40 am CST
By Debra Cassens Weiss

Los Angeles lawyer Gerald Knapton’s niche is representing companies or their lawyers in disputes over legal fees. The work is good.

"I'm busier now than I have ever been,” Knapton told the Daily Journal (sub. req.). Knapton says the reason is the inefficient law firm billing model that charges clients for inexperienced associates. But several others interviewed by the Daily Journal pointed to the economy and said it is leading to an increase in billing disputes.

Corporate "law departments are under pressure to control legal costs," said law firm consultant Ward Bower of Altman Weil. "The last three or four months, clients have applied more scrutiny to bills in response to the economy."

A survey by BTI Consulting Group that will be released in September found that the top goal of corporate counsel is reducing costs—and that includes legal bills. Corporate lawyers are watching hourly billing rates as well as expenditures for items such as lawyer meals, transportation and legal research, said BTI president Michael Rynowecer.

Rynowecer said some law firms are charging hourly fees for legal research even though they have flat-fee contracts with LexisNexis and Westlaw.

Another area of scrutiny is billing for e-discovery. Some companies are trying to reduce the costs by forming their own in-house e-discovery teams. One of them is Cisco Systems Inc., which has been aggressive in controlling its legal fees.

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