Law Firm CTO

Event Code: FIN4
Date/Time: 8/24/09 4:00 pm

Presenter(s):
Ceyda Tocsoy, Torys LLP
David Lindley, Winston & Strawn LLP
Mary Pat Poteet, DLA Piper

Preliminary Considerations:

• Support from the top, you must have buy-in from above.
• Build a business case for why these services are needed and why they should be billed.
• Don’t allow attorneys to write off these fees. Individual firm culture will come into play, you need to show the partners the value proposition and why it shouldn’t be written off.
• Need to do your research: “What is being left on the table?” vs. “What would it cost if it were sent out to a vendor?”
• You need to understand your billing system and what needs to be done to interface with the system. You need to make it as easy as possible for the accounting department.
• You need to ensure you get to see the pre-bills/bills to ensure what you envisioned is what is being billed to the client.
• What do you offer in-house? You should clearly documents your in-house capabilities and define when and what to outsource.
• Market Analysis; What are other vendors changing for same or similar services?
• The more insight you can get into your litigation support and IT costs for a matter the better you will be able to structure your flat fee arrangements. Build negotiation points into the flat fee arrangements to handle one-offs.
• In order to do flat fee billing successfully you need to fully understand what all in-house tasks cost. This can only be accomplished by tracking your work over a period of time.
• In-House fees for services are not designed to replace the use for vendors.
• Staff your department to the mid-line, never to the valleys or peaks. Then if you can handle the large case that comes in then do it, otherwise you send it out. This can be very is successful if your rates are close/similar to what the vendor would charge the client.
• Decide what you will bill for? Disk Space? Hosting? Web Hosting?

Billing:

• Define the roles and assign hourly wages; Litigation Support Manager, Litigation Support Analyst, IT Technician
• Identify and define tasks. Assign disbursement codes/cost codes.
• The best approach is a hybrid approach.
• You need to make friends with the people entering these costs into the system and that are responsible for making sure these items make it on the bills.
• Aim to break even, it justifies the existence of the group/department.
• There’s nothing ethical that requires non-attorney names to appear on the bill, so find a creative way to bill these items to avoid questions about non-attorney names.

Services:

• Outline and define the services for your attorneys. Attorney understanding means there’s a better chance of making it on to the bill. At a minimum, this should be outlined in the engagement letter. For it to be successful, you need to find a balance between what you recover and what is included in the price of the overall service.
• When faced with “We don’t pay for litigation support services” your response should be “Ok, here’s a list of vendors that can do the work for you”.

Analysis:

• Know the market and adjust your fees accordingly. You will need to do this constantly as this industry is always changing.
• Use disbursement codes to track and report.
• Identify trends and growing services.
• Negotiate better prices from your vendors and use preferred vendor lists.