Billing Clients for Computertized Research - and how it Hurts Law Firm Marketing
Lawyers USA has a great article on the effects of billing clients for certain costs. In the case of a major New York law firm it led to a class action lawsuit. The plaintiff argues that the firm violated California’s ethics laws as well as the state’s unfair business practices statute by overcharging him for computerized legal research.
It's also really bad for law firm marketing.
Granted, the bonehead who filed suit is in my opinion pursuing a nuisance lawsuit that he deserves to lose. He's claiming that the firm buys its Westlaw and Lexis service in an annual contract but didn't pass along the savings to him. When they throw his case out, I hope they hit him with attorney fees too.
By my point is, when you got to the UPS store and they mark up the cost of US Postal mail, you feel like you're getting gypped. The same thing when they charge you $5 a page to send a fax to Europe.
Hotels have been charging $7 for a tiny bottle of scotch in the mini-refrigerators for years. Airlines now charge $5 for a mediocre box lunch when you used to get a hot meal served for free. Customers don't like it when a business passes on its own cost of doing business.
The best practice for attorneys is to build computerized legal research costs into their overhead costs and not break them out separately in the bill. Clients hate seeing charges for copying or postage. If you break out every charge, it makes you look like you are trying to milk every nickel and dime possible out of the client.
Instead, build the cost of the research into your hourly time , but be sure to explain it to the client.
And in the current economy, it might be worth simply not charging the client for the cost of research. Just eat the cost. Charge for your time doing legal research, but don’t charge the client for the cost of the service. Just be sure to say … on the invoice that you didn’t charge them and let them know that’s something you do for valued clients.”
