Business of Law

Finicky In-House Counsel Refuse to Pay Law Firms for 'Legal Miscellany'

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Legal consultant Rob Mattern remembers when law firms used to charge up to 25 cents for each photocopy. Other so-called “soft costs”—word processing and faxes—were also billed to clients.

“I remember having conversations with executive directors who said the soft costs were one of the larger individual areas of revenue for their firms,” Mattern told the Wall Street Journal (sub. req.).

That was before the economy declined and cost-cutting in-house counsel began scrutinizing bills more closely. Now charges for meals, photocopies, legal research and first-class travel are drawing protests. “Clients are increasingly raising objections to big bills for legal miscellany,” the story says.

Mattern’s firm, Mattern & Associates, surveyed law firms and found that 80 percent had clients who balked at paying for legal research and 69 percent had clients who outright refused to pay for it. Mattern was among the consultants and in-house counsel who talked to the Wall Street Journal about cost-containment efforts.

One company revealed how it holds the line on legal research costs. Johnson & Johnson has its own subscriptions to online databases and tells its outside law firms to use those accounts. Others refuse to pay for first-class air travel and won’t pay full hourly fees for work performed en route. Some use electronic billing software to spot questionable charges.

In-house lawyer Jordan Kanfer, who is moving to a new job at Nippon Telegraph and Telephone Corp., told the newspaper about one of his pet peeves. It “drives me insane,” he said, to go to a law firm meeting and get billed for the food. “You’re paying a partner $800 to $1,000 an hour and they’re charging you because they ordered sushi.”

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