Budgeting for Excellence
With all the pressure to reduce legal spending, it is easy to lose sight of the importance of excellence in legal practice. Excellent legal service takes time and money to achieve; however, it should not require a blank check. Here are three tips to managing legal costs while leaving room for truly superior legal work.
Task-Based Budget Plan.
Your budget plan must be flexible enough to allow lawyers to prepare throughly and pursue outside-the-box strategies while still maintaining cost accountability. The key to striking that balance is task-based budgeting.
While is not possible to predict exactly how a complex litigation will go, it IS possible to map out the tasks involved (interviews, depositions, motion to dismiss, summary judgment, etc.) then provide realistic estimates of how much time a given task should take and which team-members will be involved (partner, associate, paralegal, etc.). Ask your lawyer to provide these task-based metrics at the beginning of the case along with their best estimate of the number of tasks the case will require (number of gigabytes, number of motions, etc.) While the number of tasks will change, keeping within the average cost per task should be something the lawyers can live with.
To often, only the relationship partner understands the client’s budget expectations. This is a recipe for disaster.
Legal teams need to collaborate internally on managing to budget. To do this, all the team members should understand (and, hopefully, agree with) the budget, their role in the case, and the expected hours-per-task. With that knowledge, each attorney on the team can be responsible for meeting the client’s expectations or – if that is not possible – flagging cost overruns before the client receives the bill.
It may be a cliche, but generally you get what you pay for.
Clients looking for excellent legal work should expect a lot of time will be spent on each task and should leave plenty of room in the budget for analysis/strategy. For example, a former partner of mine once told me he will spend twice as long as his colleagues preparing for oral argument. I have seen him argue motions, and clearly that extra prep time was worth every cent.
Catherine Krow is the founder and CEO of Digitory Legal. She is an experienced general litigator and trial lawyer and was a Partner in the San Francisco office of Orrick, Herrington & Sutcliffe from 2007-2014.