24 octobre, 2006 16:17

Eight Ways to Bill for Litigation Support

James McKenna

Special to Law.com

August 22, 2006

Litigation support is an increasingly necessary service that helps attorneys and staff do all that they need to do with client data. Many billing options exist, but before we explore them, it might be helpful to identify the various things that commonly fall under the litigation-support umbrella. These include coordination of vendor support, database creation and administration, scanning/coding/OCR'ing documents, processing data for review, transcript management, converting data, capturing data, filtering data, producing data, media duplication, extranets, some trial presentation capabilities, and liaising with clients and co-counsel, to name just a few.

While it's clear these services are valuable and critical, it's difficult to answer, "what's the best way to bill for litigation support?"

Let's take a look at some possible answers:

Option 1: Use a vendor and have them bill the client directly.

While this can occur, it usually is not the case. On the surface it would appear to be simple, but it can cause problems, since the client may not be in the loop as to what was requested or why. It is also difficult to keep track of charges that don't cross your desk and keep an eye on overall costs.

Option 2: Use a vendor and have them bill the firm.

This happens all the time and offers speed, simplicity and something concrete: an invoice that must be paid. If the request is understood, the pricing is fair and quality meets expectations, the bill can be passed on to the client easily. As an aside, there does appear to be a growing trend of clients helping choose which vendors a firm will use.

Option 3: Bill by the hour.

This solution is arguably the easiest solution to implement and sustain. Having litigation support personnel bill by the hour is familiar and helps the attorneys see how much support a client's needs are requiring and the applicable cost. It's accurate, objective and helps ensure the client pays only for work that was done on their behalf. The downside of this approach is that not all work requires a highly-trained/high-hourly-rate litigation-support professional. This becomes a concern when a person who bills at many dollars per hour charges 15 minutes for something simple. The work needed to be done, and the litigation support professional did the work, but the charge for the work may not be able to be passed on to the client.

Option 4: Bill by the task or service.

Enacting this strategy will result in specific tasks or services having a fixed charge, regardless of time or complexity. An example might be "set up database = X$" or "process 1 gigabyte of data = Y$." The idea here is to make it clear to all that there are set prices for common requests. Things that require time and experience will cost more than tasks that can be done by many. While this may make things simpler from a billing perspective, not all databases or gigabytes of data are equal: some go very fast and some don't. There is a risk of not billing the actual amount of time necessary to accomplish the job, as well as the client being billed repeatedly for various steps of a continuing project.

Option 5: Bill as a percentage of the bill.

This is similar in concept to what some service providers do to cover their miscellaneous costs associated with a project. Rarely does a carpenter charge an additional $13 for a new saw blade when working on your home. The carpenter may add a small percentage of the subtotal to the bill to cover these expenses. While simple and clear, it may appear tp be vague and hard to defend or explain if questioned. While it makes sense that larger project require more support, it may be hard to justify a large charge in this manner without details.

Option 6: Bill a fixed amount negotiated directly with the client.

It's possible to guesstimate that a particular project will take Z hours of litigation support per month and put a dollar amount to that figure. Whether it's accurate, the charges will be what was specified. Being able to say for certain what the fee will be in advance is a strong advantage. However, being locked into an arrangement that prevents you from charging the true costs in terms of time and talent could be problematic. Sometimes things that appear to be simple turn out not to be and occasionally a small project can grow very, very quickly.

Option 7: Have people of different skill sets, with applicable hourly rates, do work that relates to their abilities.

In a perfect world, highly-trained professionals would only work on things that require their expertise and others, working at a lower rate, would perform simpler tasks. This can happen on a larger or centralized team. However, if you have one person supporting an office, that person will do everything and bill accordingly. Also, everyone tends to contribute when you are pressed for time.

Option 8: Do not charge for litigation support; cover its costs in others' hourly rates.

This has the advantage of being the simplest but it may not be the most effective. Difficulties include tracking what is needed to support a given matter, justifying additional positions and not being able to cover additional costs if it is necessary to bring additional litigation support personnel on board to meet operational needs.

In general, many firms use a combination of these options or different combinations for different matters or clients. Regardless of choice, accurate time notes with a clear narrative will help those reviewing a bill understand and substantiate all of the work performed and the applicable charges. Additionally, time notes need to be submitted promptly so any questions or concerns can be addressed within the same billing period and before the bill is sent to the client. By doing this, a firm is better positioned to account for what it did, understand what was needed to do the job, plan for the future and make any necessary corrections.

What is the best way to bill for litigation support? The clearest conclusion is "it depends."

James E. McKenna is Morrison & Foerster's firmwide litigation technology manager. He is based in San Francisco.

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