The Lawyers Weekly - November 19, 2010

BUSINESS
CAREERS

Do more with less

New survey shows impact of budget cuts on in-house counsel, outside law firms

PETER BONO FOR THE LAWYERS WEEKLY

CHRISTOPHER GULY

While most in-house counsel are now being asked to do more work without an increase in their budgets, corporate legal departments are also more in control of their expenditures with outside law firms, according to the results of a survey recently released by the Washington, D.C.-based Association of Corporate Counsel (ACC).

In 2009, law department spending as a percentage of company revenues in the United States was 0.23 per cent, or a 35-per-cent increase from 0.17 per cent in 2000, when Bellevue, Wash.-based legal project management and electronic billing company, Serengeti Law, began its annual survey of corporate counsel for the ACC. But over the same period of time, the ratio of outside legal spending to inside spending has decreased by 32 per cent, from 2. 2 per cent in 2000 to 1.5 per cent last year.

Also in 2009, 37 per cent of
corporate law departments
reported a decrease in their
expenditures and a similar per-
centage said there was “no change.”
Meantime, almost the same
percentage indicated there was an
increase (38.2 per cent) compared
to a decrease (38.76 per cent) in
outside counsel expenditures.

The most pressing issue identified by in-house counsel was the same last year as it was in 2000: reducing outside legal spending.

“In-house counsel are covering more legal work at a lower cost, leaving for outside counsel those areas of extraordinary specialization or unusual volume for which it does not make sense to employ permanent in-house staff,” said the executive summary of the 2010 ACC/Serengeti Managing Outside Counsel Survey released at the ACC’s annual meeting in San Antonio, Texas.

Law firms that understand this dynamic “are going to do better” in relationships with their in-house

See In-house Page 22

Fee for all: are lawyers overbilling clients?

Author alleges law societies turn a blind-eye to lawyers overbilling their clients

Indeed, as R.J. Halina’s book, The
360-Minute Hour: Why Lawyers Cost So
Much reveals many lawyers have no
qualms about overbilling and occasionally
bilking clients. Her book is a detailed
exposé of lawyers billing practices, and it
also offers pragmatic advice on hiring and
dealing with lawyers for the lay public.
The title of Halina’s book is derived
from the practice of lawyers billing in
minimum of six minute increments,
even if a task took considerably less than
six minutes, such as flipping an email or
leaving a voice message. By charging for
the full six minutes for a task that
required a minute, theoretically at least,
a lawyer could generate 360 billable
minutes in an hour.
Halina’s account of legal billing prac-
tices is based on her 25 years of working
in law offices both large and small in
Toronto and her 10 experiences as a
client. During her career as a law clerk
Halina saw how the legal profession
evolved from a “fair legal service pro-
vider” to a “billings-oriented business.”
As a client in five out of 10 engagements
she encountered “shoddy, bordering on
incompetent, quality of legal work” and
“ridiculous, on occasion bordering on
fraudulent billing, practices.”
She lays the blame mainly at the feet
of the law societies—which have been
“unwilling to seriously oversee and regu-
late quality and billing practices of their

TITLE:
The 360-Minute
Hour: Why Lawyers
Cost So Much

MICHAEL RAPPAPORT

AUTHOR:
R. J. Halina
Men-of-law in medieval England
found it unseemly to ask for money to
argue for justice. Hence, attorneys in 14th
century courts wore a tippet—a hood
over their shoulders with a pouch in the
back—in which clients could discreetly
slip coins as payment for skillful advocacy.