In-House Counsel

How much fee detail should law firms be asked to divulge if they work on a fixed fee?

By Rees Morrison

My position has been that a general counsel has the right, even though the firm is working against a fee set in advance, to request records of timekeepers, hours, and rates (See my post of Sept. 13, 2006: still need to review bills.). Time recording goes on anyway in the firm, regardless of the set fee. But an argument for non-disclosure by a law firm has potency.

If the law department decides that a fee for a service is acceptable, why should the law department be entitled to know how the sausage was made? If a law firm manages to make a big profit on the representation, having taken a risk on a set fee, that?s no client?s concern. Also, part of the trade-off by a law firm for agreeing to a fixed fee is to be able to eliminate the hassle of detailed bills.

Still, if I were a general counsel, I would not want a firm to beseech me for additional money if a matter demands more work than they thought when they agreed to the fee if that firm has squirreled away some of my payments on very profitable matters. That situation assumes a portfolio of matters being handled by the firm. Additionally, I would want to know the economics of the services provided so that I can use that information if I need to find a replacement firm.

Full post as published by Law Department Management on June 18, 2009 (boomark / email).