A New York trial court adopted Sterling Analytics’ expert opinion that a title insurer’s obligation to pay for the defense of a title action was not worth more than $600,000 in fees claimed by petitioner, but only $38,840 in “reasonable” fees. The action involved the defense of a dispute between a homeowner and the Village of Scarsdale concerning a strip of land adjoining the residence. The insurer had disclaimed coverage, but the court later found that a defense was required, resulting in a fee submission by the defense attorney to the title insurer for several years of defense work.
The Las Vegas Sun recently reported that the state of Nevada will pay a Virginia law firm $6 million in legal fees to defend a $40 million suit brought against the transportation department (NDOT). The suit relates to an $85 million contract between Ames Construction Company and the NDOT to build a section of freeway in Carson City. Ames claims that the state caused delays, forcing it to lose money.
The Association of Corporate Counsel (ACC) recently released the results of its 2011 Chief Legal Officer survey. Almost two-thirds (63%) of in-house counseled surveyed said they are now using some form of value-based fee agreement. This percentage is up considerably from prior years. Value-based fee agreements are fee arrangements that are typically not based on billable hours. The survey found that these types of arrangements represented 10% or more of the work performed by outside counsel, as reported by the respondents who use such arrangements.
The municipal government of Cape Coral has hired outside counsel to represent the town interests in negotiations with unions. The firm of John Hament charges $195 an hour for his services. However, with over $250,000 dollars spent without a deal being made, some people believe that the firm has been nothing but a waste of taxpayer dollars.
The Los Angeles Times reported that one of the city’s top pension appointees is seeking reimbursement from taxpayers for his legal bills. Sean Harrigan, former president of Los Angeles’ Fire and Police Pensions board, stated he incurred “significant” attorneys’ fees after an investigation by the Securities and Exchange Commission into California pension funds. Harrigan believes he is entitled to reimbursement because last year Los Angeles paid a former city employee over $100,000 for the legal costs he sustained while he was the target of state and federal investigations into campaign fundraising. However, this former employee was not compensated until each agency confirmed they had dropped their investigations.
The Wall Street Journal reported that Stifel Financial Corp., a financial holding company, had an 84% reduction in quarterly profits in Q2. According to the company’s Q2 earnings release, profits were significantly impacted by the ongoing civil litigation with five southeastern Wisconsin School Districts and a related regulatory investigation. In addition to the litigation cost associated with those cases the company had significant expenses related to its merger with Thomas Weisel Partners Group, Inc. Stifel reported that these combined expenses accounted for a $27.9 million decrease in net profits.
In a recent article published by The Wall Street Journal, Patrick G. Lee reports that corporations are more frequently turning to online reverse auctions as a method to reduce outside legal fees. Some of the companies using reverse auctions include Toyota, Sun Microsystems, GlaxoSmithKline, and eBay. Reverse auctions can reduce legal costs anywhere from 15% to 40%, saving large companies a significant amount of money.
The Fifth District Court of Appeals in Daytona Beach held that Senator Gary Siplin did not abuse his power by using his status as senator in an attempt to go around a barricade to access a parking space, reversing the Florida Commission on Ethics earlier decision. This four-year legal battle is reported to have racked up a $109,000 legal bill.
Litigation matter budgets can be a concern when hiring a law firm to perform any number of services. Communication between the client and the law firm is key- both sides must be updated of any cost-related issues that may arise. Moreover, it may be wise to designate a representative to handle all communications on each side. If a legal bill exceeds the client’s budget, the law firm should contact the client. Unfortunately, not all law firms adequately communicate issues and budget concerns with their clients.
When internal pressures mount to cut the legal fees, here are 5 quick unacceptable billing practices to examine legal invoices for.
Block Billing: Billing time in increments that do not allow a billing coordinator to determine how much time is spent on each specific task is one of the most common practices to be on the lookout for. Entries that merely list a series of tasks, with an hour amount next to it, make it impossible for a client to figure out how long each task took and should be rejected until specificity is established.