Getting your budget under control By Michael Rappaport
Restraining runaway litigation costs
he French Enlightenment philosopher Voltaire wrote, “I was never ruined but twice —
once when I lost a lawsuit, and once when
To assist in-house counsel with the often tricky task
of managing legal costs in litigation, In-house Counsel
consulted two of North America’s most knowledgeable experts on legal fees, John Toothman and William
Ross. Toothman is a Harvard-trained lawyer and the
founder and principle of The Devil’s Advocate, a Vir-ginia-based firm that provides legal fee management
and litigation consulting services. Ross is professor of
law at Samford University in Birmingham, Ala., and a
nationally-recognized expert on the ethics of legal fees.
He has authored two books on attorney billing issues,
The Honest Hour: The Ethics of Time-Based Billing by
Attorneys and Legal Fees: Law and Practice (with Toothman), as well as numerous articles.
Before retaining outside counsel it is essential to find
a law firm that has experience handling your exact le-
T
gal matter, according to Toothman. When searching
for representation, you should request that firms pro-
vide a detailed plan and an itemized budget. “If the
proposed plan and budget includes a lot of caveats it
is typically a sign that the firm lacks sufficient experi-
ence with your particular matter,” Toothman cautions.
“And you should look elsewhere.”
After selecting outside counsel draft a retainer
agreement. Do not sign a retainer agreement that was
drafted by the law firm being retained as it generally
will be lop-sided in favour of the firm and detrimental
to the client.
“If the law firm drafts the retainer agreement it may
appear innocuous on its face, but all the vital provisions that protect the client may be missing,” Toothman warns. Many of the provisions that law firms slip
into retainer agreements according to Toothman are
waivers of client’s rights. For instance, many law firm
retainer agreements will contain arbitration clauses
which remove a client’s right to take a fee dispute to
court. The retainer agreement should address the following issues with regards to managing legal expenses:
billing of fees and expenses, hourly rates, payment
