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Lawyers are always looking for clever ways to increase their bottom line. These lawyers scrutinize every cost associated with running a law firm and attempt to pass it on to a client. If they can’t justify billing the client for the cost of something, they just increase their hourly billable rate and make-up for it that way. Either way, the lawyer wins and the clients lose. It’s a bad business model and something we don’t do at Proper Defense.
Below is a list of billing practices and cost allocations that we don’t engage in despite the fact that many other laws firms do. Before you decide to do business with us, spend a few minutes reading this page. That way when we are doing business together, you don’t ever feel like you are being taken advantage of.
Many lawyers aren’t going to like that we published this on our website. We say to hell with them.
If you’ve ever received a bill from a law firm you know what this one is. This is the time entry on that bill that says that three different attorneys all met for an hour and “strategized” about your case. That hour cost you $1,500. Was it worth it? Probably not. Most of the time these types of charges reflect the time a more senior attorney spent being brought up to speed on a case that is being handled by lower level associates. The associates know the case backwards and forwards (or at least they should) but the senior partner barely remembers the client’s name. The meeting usually consists of the associates bringing the senior attorney up to speed on the matter only to have the senior attorney assign a task or two at the end. This is the senior attorney’s way of justifying the time spent since he helped “move the case forward.” We don’t do this. If two or more attorneys or legal staff meet to discuss your case you only pay the hourly fee for the most senior person in the room. Everyone else is free.
The dreaded hourly rate increase. After you spent weeks finding the right attorney who charged the right price they go and send you a letter a few months into the engagement that announces that “due to the rising cost of providing legal services we will be increasing the hourly rates we charge you.” In other words, they want a fancier office and you need to pay for it. At this point, you are kind of stuck. If you hire a new lawyer that agrees to the lower rate you previously had you will have to pay that new lawyer for all the time he/she spends getting up to speed on your case. If you stick with your current lawyer the cost of the case just went up. At Proper Defense, the rate you are quoted at the beginning of the case is the rate you pay until the case is over. While we may increase our rates for any new matters you have us handle, your rates for all current matters stay the same. Even if the case takes ten years.
Lawyers routinely have to travel on behalf of their clients. They go to meetings, depositions, mediations, court hearings, and interview witnesses. Their clients are billed for the time spent traveling to these events and are required to reimburse the attorneys for their mileage. At Proper Defense, it is one or the other. If we are required to travel for your case, we will either charge you for the time spent traveling or ask to be reimbursed on a per-mileage basis according to the IRS rate at that time. We don’t make you pay for both.
A lawyer cannot do his or her job without having the ability to do legal research. Books, treatises, guides and online databases are an integral part of a lawyer’s ability to do the job. But why should the client pay for it? Some law firms take the costs associated with legal research and either divide those costs among all active clients and bill each one proportionately or assign a portion of those costs to each client based on usage. What do you think a lawyer would say if he/she was charged a “knife tax” while eating at a restaurant? Knives are essential to a chef’s job… right? At Proper Defense, we don’t pass the costs of legal research on to our clients. Those costs are part of our overhead. We’ll pick up that tab.
Back in 1970, it was commonplace for law firms to bill clients for the time spent by staff to type up documents for a client. This was before there were computers and modern-day word-processing software. Times changed, technology changed, unfortunately, many law firms did not. Chances are if you walk into a law firm that still has wood paneling from floor to ceiling, they still charge clients for time spent “word processing.” Don’t get suckered into paying for this. We don’t charge our clients for it and neither should they.
This is a moneymaker for many law firms. They not only charge you per page for copying, printing, scanning or faxing, but they profit on each one. Do you really think it costs them $0.18 to copy a piece of paper in black or white? Or that it cost $0.25 per page to scan or fax? It doesn’t. Some law firms have higher profit margins on their printer than they do their own associates. At Proper Defense, we don’t have a $75,000 printer that can print 50,000 solid color pages per minute. One of the reasons why we don’t have such a cool piece of equipment like that is because we don’t profit from copying, faxing or scanning documents.
Few other industries bill their clients or customers for standard postage like the legal industry. Nothing like drafting a client update letter, billing the client for the time drafting it, sending it to the client and then billing the client for the postage. I can imagine that they are thinking… “Thanks for the detailed update on my case and the charge to send it to me. Next time, pick up the damn phone.” At Proper Defense, we only charge postage for specialty packages like overnight mail or certified letters. We don’t pass the cost of standard postage on to our clients.
Having to stay out of town on client business is, at times, necessary. Having to stay at the Waldorf and eat at Mastro’s Steakhouse is not. When we travel for our clients we stay at reasonably priced hotels and don’t pass the cost of food on to our clients.
Some law firms, in an effort to make it appear as if they won’t bill their clients for the things discussed above, will instead charge a flat “administrative fee” to cover their costs of doing business. The administrative fee ranges from one to eight percent of the total monthly billings. This is essentially a “cost plus” contract. The more fees you incur, the higher the administrative fee. The taxpayers of America hate the government’s “cost plus” contracts. You should hate your lawyers’ “administrative fee” contracts just the same.
California has really strict laws regarding who can legally be called a paralegal or legal assistant. In order to hold such a title, one must usually complete some form of higher education, obtain the requisite work experience, pass an exam and keep up with continuing education. It’s surprising how few self-titled “legal assistants” and “paralegals” actually abide by these rules. Oftentimes you’ll find that the “legal assistant” or “paralegal” does not have the formal schooling and training to hold such a title and is being paid $14 an hour but billed out between $80 and $200 an hour. The only one who benefits from these shenanigans is the law firm. At Proper Defense, if we utilize the services of a legal assistant or paralegal you can rest assured that they can legally be held out as such and that you are getting your money’s worth.
