General counsel are frustrated by law firms’ unwillingness to be open about pricing information, research revealed this week - and are spending up to three working days a month on disputes over invoices.

Research conducted by the London committee of the Law Society’s Commerce and Industry (C&I) Group revealed that general counsel are increasingly drawing up their own letters of engagement with firms to combat a lack of up-front information about pricing.


In-house counsel complained that firms did not readily volunteer hourly rates for all levels of seniority, information about their attitude to fixed and capped fee arrangements, or policies on charging for travel time or internal disbursements.


General counsel questioned also said they were disappointed by firms’ failure to provide information at the outset about their level of professional indemnity cover, any complaints and disciplinary proceedings against the firm, or any history of retainers being terminated early by other clients.


Armitage: bill description vital

C&I London chairman Anthony Armitage said: ‘Clients are starting to write their own letters of engagement because they want transparency in billing arrangements. For example, many firms do not make it clear whether or not they charge full hourly rates for travel time - even if they are performing work for other clients as they travel - or whether costs such as photocopying are included in the hourly rate.’

According to the research, lack of transparency over unit of time costing can be a particular issue for in-house lawyers. Mr Armitage said: ‘One head of legal believed his firm had acted in an underhand way by raising the unit of time it used to bill work. His legal bill doubled because where a task took less than the new 15-minute time unit, the lawyers were rounding up.’


He added: ‘The research also shows that in-house lawyers are demanding more description on bills, and the quality of the narrative is crucial. They may receive a bill saying that 30 telephone calls were made, but it will not explain what was achieved by this.’


In-house counsel are under constant boardroom pressure to justify why they are staying with a particular law firm. Mr Armitage said: ‘Something that came out strongly from the research was that it is no longer seen as the safe option for in-house counsel simply to stick to a firm with a historical reputation. They need to be able to show the board that they have conducted like-for-like rate comparisons with other firms.’


The research was based on interviews with a focus group of seven senior in-house C&I London committee members, with findings e-mailed to the group’s membership of more than 1,000 in-house counsel for comments.