The Devil's Advocate
Legal Fee Management & Litigation Consulting

 

Our 22nd Year  
Thanks to all our clients and friends  

 

 

 

 

More Details on Some DA Services

    Here's more information on a few of our services and things clients should be watching for:

 

 Hourly Rate Inflation:
Watch Your Legal Bill for Changes in Hourly Rates

    Hourly fees create a problematic business model:  To make more revenue year after year, the hourly law firm can only do a few things.  Adding timekeepers and billing right up to 24 hours in a day, 7 days a week can only get you so far, especially if the client's looking over the bill.  Fiddling with expenses is another outlet that doesn't get you too far before clients notice.

    But the classic hourly revenue enhancement gimmick has always been the annual attempt by law firms to impose a unilateral increase of hourly rates.  But this can be very tricky since partner rates have to reach a plateau -- after a few years of increases, they begin to become absurdly high.  There aren't any 20 year partners making $3K per hour.  Just look at all the negative PR firms get for claiming they actually charge $1,000 plus rates -- even though these aren't real rates, just suggested retail ego rates that are rarely if ever collected from sophisticated, alert clients.

    Most of the hourly rate increase damage really has to come from down in the trenches, among the associates and junior partners, plus all those quasi-professional mystery billers that are branches off the legal evolution tree.  The firm's excuse for claiming a right to make an arbitrary increase (it's never a decrease) every year is usually either (1) everyone else is doing it (the "Jump Off the Brooklyn Bridge" rationale) or (2) our people have gotten more valuable since last year, even if they haven't done anything special except getting on-the-job-training at your expense, which only suggests that they were worth less last year, not more this year (the "Fooled You Once" rationale), and so on.  The more desperate the firm, the more breathtaking the increase -- $5 per hour used to be frequent, now we sometimes see increases over 25% in a single year.

    Even as the legal economy has been crushed by the Great Recession, and real hourly rates have been flat or even going down for years, firms still take a shot at the annual hourly rate inflation game.  But smart firms are careful to avoid causing trouble with their best, most vigilant clients.  Instead, the primary targets are clients who aren't paying attention, are naive or afraid to complain, or aren't paying their own bill.  (We call these soaker and absent clients.)  And firms also tout the practice as an excuse to jack up alleged rates whenever there's a chance for fee shifting, for example.

    Clients should be managing their fees, including keeping track of things like changes in staff, wasted or duplicated effort, and changes in the hourly rates.  Shopping around purely in a quest for lower hourly rates overlooks the rest of the equation, but fixing the hourly rate at the threshold only makes sense.  (And don't fall for "blended rates" for clusters of billers -- you'll just end up with a giant crew of inexperienced timekeepers.)

    Without consideration for their clients' rights or interests, some firms try to build terms into their lopsided retention documents granting themselves a basis to make arbitrarily large and frequent changes to hourly rates, without any further notice to the client -- which makes the whole agreement illusory, something a good lawyer would be telling you, not using against you.  (If a firm tries to get you to sign a retention agreement with this or similarly disrespectful terms, run for the door.)  Some alternatives to hourly legal fees avoid this problem -- though they may have other issues, too.

    And watch out for the camouflaged fee increase.  All too often, we see firms that just change the rates by using new rates in a summary at the bottom of the bill or hidden in the calculation of the total fee without showing the rate actually used -- without any notice to the client that the rates have changed.  You only catch the new rate by holding the new bill and the old bill side by side.

    Usually this happens with the January bill, but it can come any time.  Occasionally, firms raise rates for some timekeepers several times in the same year -- our record is four times in one year.  And we even see clueless firms trying to increase rates in January when the client just hired them in December or November.

    Check your next bill -- and every one after that -- for any surprises, then complain if you find any.  If your lawyers really got that much better, they should be able to wrap up your matter and move on to some other client that much faster, too.

Phone: (703) 684-6996 * E-mail: Devil's Advocate


Evaluate Legal Billing Software:
Plug the Holes in
Your Legal Billing & Fee Management Software

    Lots of software vendors are selling packages that are supposed to manage your legal fees, including promises that the software can outwit lawyers and "review" each bill with the touch of a button.  These packages may be able to keep your bills organized and prevent basic mistakes like double payment of invoices -- if the firms comply voluntarily.  But no software can keep up with inexperienced, inefficient, or greedy law firms or plain old sloppy timekeeping.  For every software package and fee management shortcut, there are an array of techniques lawyers may use to circumvent the software, rendering it worthless as a management tool.

    Before you waste lots of time and money on a software package, consult with Devil's Advocate about the key features you need to look for, along with the holes in each program.  We can also analyze your software's results to see how firms are evading your management efforts to help you patch the holes.  In the event of a fee dispute, we can also provide our usual bill review and expert testimony services -- no software package can take the place of a real life expert.

 Phone: (703) 684-6996 * E-mail: Devil's Advocate


Clients and Law Firms:
Give Us a Call Before You Jump on the Alternative Fees Bandwagon

    Lots of law firms, some clients, and the legal press are touting alternative legal fees, like flat fees or bonus fee hybrids, as the solution to clients' concerns about hourly fees.  This is at least the third time in 20 years that hourly fees have been declared dead in favor of alternative fees.  Each time the alternative fees bandwagon has been through town, we've helped firms and clients to understand that there is no panacea for unexpectedly high legal fees.  Some alternative fees might fit your situation, but others (especially the ones proposed by law firms) are even worse than hourly fees.

    For firms seriously interested in reasonable alternative fees, we can show you how to understand and reduce your risk so you can quote a fee that's also fair to the client.  To get comfortable with alternative fees, firms need to understand themselves first.  This isn't the time to load up your fee agreement with ass-covering language and hope the client doesn't ask too many questions.

    We've shown clients and firms that every alternative fee has its own disadvantages as well as advantages.  With the proper design, they may perform better than hourly fees, especially by reducing your fee management burden and providing incentives for the firm to do what's best for you, too.  Before you abandon hourly fees, you should know what you're getting into.  Contact us for more information.

Phone: (703) 684-6996 * E-mail: Devil's Advocate


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Last update: 01/07/15

Established 1993

Our 22nd Year

 

 



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For more information, contact our Marketing Director,
Elizabeth McGee
The Devil's Advocate, PO Box 8, Great Falls, Virginia 22066 (USA)
Phone: (703) 684-6996 * Fax: (202) 499-7011 * E-mail: Devil's Advocate

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The Devil's Advocate is a registered trademark, and Independent Counsel, Civilian's Guide to Lawyers, the Client-Friendly Billing Agreement, and the Client Bill of Rights™ are trademarks of The Devil's Advocate or licensed to DA.
All materials in this web-site copyright January, 2015 by The Devil's Advocate (licensed to Devil's Advocate, LLC a/k/a TLF Consulting). All rights reserved.
We do not provide legal advice by e-mail or through this site.  We do not provide legal representation.  All DA engagements must be in writing.
The information in this website represents our opinions (or opinions of others) and is believed to be accurate, but we cannot guarantee that they apply to your situation.

Visit Devil's Advocate for legal fee management and litigation consulting, including legal bill reviews, expert testimony, legal malpractice, and lawyer ethics issues

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Publications include: To Get Paid, Get Reasonable, Trial Practice Checklists (West Group); Legal Fees: Law and Management (Carolina Academic Press), CGL, Civilian's Guide to Lawyers, Client Bill of Rights, Client-friendly billing agreement, hourly fees.

Headquarters in Great Falls, Northern Virginia, USA, in the Metropolitan Washington DC (District of Columbia) area.