There are lots of problems with hourly fees, not just high hourly rates. Whether it’s a platoon of inexperienced lawyers getting on-the-job training at your expense, unproductive gab fests, duplication of effort, mystery billers, suspiciously high hours, or pointless and vague tasks, hourly bills reward inefficiency and delay, not cost-effectiveness. “Keeping the hourly rates reasonable is just one step in managing your legal fees,” Toothman notes. (Mr. Toothman is a Harvard Law School graduate who’s been practicing law for over 30 years, including many trials.)
According to John Toothman, “Lawyers manipulate the hourly rates they quote -- higher ‘suggested retail’ rates for naive clients, lower rates for valuable clients who haggle, special rates for family and friends, and so on. Some firms have several rates for the same lawyer. You can never be sure you’re getting the whole truth when you ask about a lawyer’s hourly rate. Then, even if you thought you got a good rate, the firm arbitrarily inflates its hourly rates whenever it wants to.”
“While senior partner rates get lots of attention for breaking the $1,000 per hour barrier, these are just ego or vanity rates that are so laughably high that not even the firms take them seriously – the firms collect much less than advertised rates from serious clients,” Toothman explains. “The real damage comes down in the trenches, among the platoons of associates and junior partners, plus all those quasi-professional mystery billers, who are under tremendous billable hours pressure, where an arbitrary annual increase can be many times the rate of inflation.”
Toothman warns that clients shopping for a lawyer should avoid firms with lopsided fee agreements including terms, for example, that supposedly allow the firm to increase rates and staff whenever they want, in whatever amount they want. “The fee still has to be reasonable,”
And watch out for the camouflaged rate increase. As John Toothman illustrates, “We see firms that give themselves a hidden raise by inserting new rates into their billing software, without any notice to the client that their rates have changed. You have to catch the new rate by holding the new bill and an old bill side by side.”
One of your New Year’s resolutions should be to find yourself a good lawyer who charges a reasonable fee. If you can’t get your current firm to treat you with respect, issue realistic budgets, and bill you reasonably, look for another lawyer who will.
Devil's Advocate® has decades of experience consulting with clients and lawyers about all types of legal-business issues. And, before you agree to pay a suspiciously large fee, check with us: We do legal bill reviews, which is another way to reduce unreasonable legal bills or defend yourself in a fee dispute. Other services include matter monitoring, helping clients to draft fair fee agreements, and selecting a reasonable firm or replacing a bad one.
Since 1993, Devil’s Advocate LLC has provided cost-effective legal fee management and litigation consulting services to hundreds of clients, law firms, government agencies, and individuals around the United States and internationally. Our services include legal bill reviews, expert testimony, second opinions on litigation issues, litigation monitoring, case post-mortems, legal ethics analysis and opinions, legal malpractice analysis and opinions, law firm selection, legal fee agreement drafting and evaluation, evaluation and testing of legal fee management software, design and analysis of alternative legal fee arrangements, and more.
John Toothman, the founder of Devil’s Advocate, is an experienced trial lawyer and author of dozens of legal publications. With more than 30 years of experience, John graduated from Harvard Law School, was a trial attorney at the US Department of Justice, and has been a partner in Washington, DC, area law firms. John is the author of Trial Practice Checklists 2d (with Douglas Danner) and Legal Fees: Law & Management (with Professor William Ross). His latest publications include the Civilian’s Guide to Lawyers e-book series.
John’s free blog for clients is at http://blog.CiviliansGuidetoLawyers.com
Call us at 703-684-6996 or visit our website: http://www.DevilsAdvocate.com