New England Biz Law Update
John Hanify
When I first began practicing law in 1974, I was asked to assist Edward O. Proctor Sr. by completing a legal research project of interest to him. To a young lawyer, Proctor was an intimidating figure.
A founder of Ely Bartlett Brown & Proctor, he was an astute, polite – but perfunctory with a junior associate. He was in his mid-80s and was still in the office every day.
I completed my assigned memo and, in my exuberance to be comprehensive, photocopied two of the main cases discussed in the memo.
“What are these?” Proctor murmured.
“They are photocopies, sir.”
“I do not accept photocopies. If you want me to read the cases, bring me the books.” Well, precision was a life-long trait of this veteran and, after all, who could trust a copy machine!
The billing relationship was similarly primitive in those days. We had very little computerized equipment – “mag cards” were just beginning to replace white out. The bills that were sent to clients contained no itemized description, rather a narrative that generally explained the task reflected in the bill.
The identity of lawyers or billing rates was not disclosed. If actual time sheets were reviewed, which was not always the case, the time always reflected a rounded sum.
I was told that the firm had accumulated expertise in particular areas, and that when the firm provided advice in those contexts, it could often complete the task more quickly and thoroughly than other firms.
As to those kinds of services, the senior lawyer might feel it appropriate to bill a premium if the actual time seemed modest in terms of the service’s value. The point was that neither lawyers nor their clients assessed the value of services by counting bodies, scrutinizing rates or regulating expenses.
The emergence of law “as a business” came not only as a result of the growing complexity of the law in the past 50 years and the actual or perceived need for specializations, but also as a result of the computer itself.
Once the lawyer and the client agreed that the computerized aggregation of time more accurately and objectively reflected value, the profession had compelling financial incentives to deepen specialized practices, hire more lawyers, and impose billable hourly goals on lawyers and para-professionals.
After all, if the computer reported it, it must be fair and accurate. The new system provided hard-numbered quantification for services that in turn promoted unassailable legitimacy, the indicia of reliability and precision.
Thus, in addition to time dutifully reported by multiple timekeepers, law firms could even begin to measure the amount of time their word processing systems spent in generating specific documents, heralding the “documentation preparation fee.”
Whether this is a more equitable system than the bills derived from Mr. Proctor’s subjective billing system is a very good question. The computer serves many purposes, sometimes the wrapper for unknown or unascertainable ingredients. There is no magic solution to the problem of billing, particularly in litigation management.
Advancing the Relationship
However, what follows are suggestions that might advance the relationship between outside and inside counsel.
1. Encourage law firms to consider sum certain monthly billings to eliminate unpredictability.
These amounts can be advances against an agreed-upon budget that may also facilitate an upside success feature. Confine the team of billers to identifiable souls, with job descriptions related to the case. Inquire as to whether there are mandatory billing goals in effect.
Internal pressures to bill necessarily force inaccurate billing. Associates should be busy because of effective and efficient delegation of tasks and not because of an arbitrary daily billing quota. Associates, indeed all professionals, exercise better judgment when their personal lives are in balance with their professional obligations. Exacting 2,100 or more annual billable hours is counterproductive for clients, begets mistakes and erodes continuity of service.
2. Have inside and outside counsel collaboratively direct the management of a case.
Frequently, after litigation commences, inside and outside counsel simply do not spend enough time collaboratively managing the case. Team members change, or increase in number.
Decisions to do less or be more surgical are difficult for the outside counsel to make alone or, in the absence of a disciplined partnership, become simply inconvenient to make. The procedural course of the case then gets out of the client’s control and the in-house counsel is confronted with a new problem rather than a solved one.
3. Develop common sense evaluation practices.
More fundamentally, outside and inside counsel need to develop partnerships that will recurrently revisit the following kinds of questions with respect to particular matters.
Is there value in what we are now doing? Do we need fewer, not more bodies and memos? Can we focus on the most important documents and depositions and make hard judgments about discarding needless discovery or the research on obscure issues?
Containing the team, identifying each member’s function and developing a billing relationship that reflects a shared perspective about the scale of the project promotes predictability, sensible planning and common incentives.
In some small measure, we might advance GDP if we appreciate the limits of computerized budgets, billings and billers and engage in a partnership through periodic, focused and subjective analysis of whether these mighty resources have in fact brought us closer to the solution of a problem, whether what we are doing adds value on a timely basis.
This overridingly important assessment involves a personal exchange, face-to-face, between counsel and client or in-house counsel. The collaborative effort that succeeds will find no substitute in technology or advanced management techniques.
Counseling and collaboration are certainly the most subjective aspects of problem-solving but they remain an indispensable part of our professional relationships.
Perhaps the discernment and judgment practiced a generation ago should trump the superficial attractions of today’s technology.
John Hanify is director and a shareholder of Hanify & King in Boston (www.hanify.com). He co-founded the firm 25 years ago and directs its litigation practice. He can be reached at (617) 423-0400.
