Some time ago, I had a doctor come to me for help sorting out a large legal bill he had incurred with a large law firm. He had a Medicare billing problem and had gotten into some trouble with the feds. Although he incurred several hundred thousand in legal fees from this law firm, the firm did little to resolve his Medicare billing problems. So the cardiologist went to an attorney at a small firm who was able to quickly and satisfactorily the Medicare billing issues. The total bill from the new attorney at the small firm was less than $10,000.
The problems I found with the legal bills from the firm filled a 12 page opinion letter. But beyond the individual billing issues, it was pretty clear to me in reviewing the firm’s bills that the client had got caught up in what I would call the “protocol” of this law firm. By “protocol” I mean the standard approach the firm likely takes to handling most any matter.
While I have found over the years that while many law firms do bill responsibly, there still are too many law firms that seem to have the same type of firm protocol or approach to handling even the smallest of matters that invariably leads to overstaffing, overworking, and overbilling. More importantly, following a standard protocol in every matter often leads to overlooking any real opportunities to quickly and efficiently resolve a matter for a client.
Of course, overstaffing, overworking, and overbilling can occur at any size of law firm. And I have seen countless examples of overworking, overbilling, and overlooking real opportunities to efficiently resolve a matter for clients at small law firms and large law firms alike. In fact, the only difference I can see between large law firms and small law firms is that the larger law firms are more likely to be more formalistic in their protocols while smaller law firms may do the same things, but on a more informal basis.
So how do clients avoid getting caught up in a law firm’s protocol (formal or informal) that can lead to overstaffing, overworking, and overbilling?
The first thing to do is to realistically assess whether your legal matter can be best handled by a large or a smaller law firm. My advice on this subject has been the same for years: if it is the type of matter that could be handled by either a large law firm or a small law firm, always hire the smaller law firm. For one thing, the hourly rates at smaller law firms are almost always lower than hourly rates at large law firms.
But, of course, the trick here is to determine if the matter is one that could be handled by a smaller law firm as opposed to a larger law firm. On this point, my rule of thumb is that the larger and more complex the issues, the more likely it is that a larger law firm is needed. I recently blogged about this in a post entitled “Whether a $1,000 an Hour for a Lawyer is Reasonable Depends on Whether You Need a Cadillac Escalade or a Honda Civic.” That post covered some things you should consider when deciding whether to hire a larger or smaller law firm.
But whether size law firm you decide to hire, you should not just turn the matter over to the firm and expect that your matter will be handled expeditiously and efficiently (including economically). In fact, just turning the matter over to the law firm without taking further steps is a sure way to blindly getting caught up in the law firm’s protocols which can lead to overstaffing, overworking, and overbilling.
As to what additional steps need to be taken, the three most important steps to take include agreeing on the objective(s) in the matter; 2, agreeing on steps to be taken to successfully meet the objective(s); and 3. agreeing on who in the firm will be working on the matter. In a future post, I will go over each of these steps in more detail. But for now I will just leave it that discussing (and resolving) these three issues upfront with the law firm (rather than just turning the matter blindly over to the law firm) will go a long way in ensuring that you will not get caught up in a law firm’s protocols that can lead to overstaffing, overworking, and overbilling.