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The lawyerly tendency to overbill

By November 6, 2006law

Piggybank
The Wall St. Journal Law Blog reports
on Amtrak’s woes in overpaying law firms millions of dollars between
2002 and 2005.  Apparently, Amtrak didn’t work hard enough in examining
its attorneys’ bills.  My simple question is: why should clients even have
to scrutinize their law firm bills?  The answer is they do because many
law firms, particularly large firms, have an inclination to ’round up’
in billing (to meet minimum billable-hour requirements).   And they also have a strange inability to find efficient
solutions to legal problems, especially when they bill by the hour.
Large law firms have a lot of overhead to carry, which is the biggest
reason for these undesirable tendencies.

But many clients are getting wise and hiring good lawyers who strive
for efficiency.  One way to assess how much a lawyer values efficiency
is to examine how much overhead he or she carries.  If you hire a good
lawyer who believes in efficiency then you won’t have to spend so much
time auditing their bills.  In fact, you might not have to spend any
time at all.


P.S. If you appreciate these kinds of observations, you might want to read this as well.

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