Clients want clearer bills
Data shows that in house counsel are unimpressed with the level of transparency they receive on law firm bills
Thursday May 6, 2021
When I get the bill at a restaurant, I want to see exactly what I’m paying for. The breadsticks, the 20% service charge, the £7 espresso – I want to know it all. Seeing that breakdown means that even if I don’t like paying the bill, I’m at least reassured that I’m not getting ripped off.
But while you would be hard pressed to find a restaurant that doesn’t tell you what you are paying for, it’s still a different story with law firms.
According to data from Legalease Research Services, which contacts 150,000 clients in the UK annually to provide assessments of law firm service, transparency around bills remains one of the areas that clients are most unhappy with.
Despite the many years that in-house counsel have been complaining about law firm billing arrangements, the chart below shows how clients are still dissatisfied with how much information they receive. And things are getting worse, with clients 1% less satisfied with billing transparency in 2020 compared to 2019:
The data also shows that larger firms, who tend to be more wedded to hourly billing, score particularly badly on fee transparency. The UK top-25 and Global Elite firms were rated well below the UK average in aggregate for how transparently they billed. Only boutique firms, which includes firms like Enyo Law and Leigh Day, received above average feedback on this metric.
In many ways this is not surprising. Large firms often have a small army of fee earners working on a matter. As a client I might know the lead partner well, but be less clued up on what exactly their four juniors are doing and how I’m being billed for it. Larger firms are also more likely to work on big complex matters, such as multi-billion pound arbitration or infrastructure projects, where costs may be less easy to predict.
If we look at some of the comments left by in-house lawyers, we get more of a flavour about what is ticking them off.
“We had to push hard to get the firm to provide necessary [level of detail] and what we wanted was pretty basic really. This is something this law firm ought to have mastered a long time ago,” wrote one client.
Another said: “Despite numerous requests for transparent billing in accordance with our policies, fee estimates always overrun.”
While a third said: “Their billing is extortionate. They provide me with an estimate and then bill nearly three times that. Despite our protestations of duplicated work and charges they have refused to make a single amendment.”
Common gripes were firms failing to provide: regular work in progress reports; itemised billing broken down by lawyer’s name, time, fee rate and the reason for the fee on each invoice; unexpected charges for minor admin tasks; fee over runs; and being slow to in-voice.
None of this is rocket science. Accurate quotes, timely itemised bills and regular communication with clients about what they are being charged are all easy to achieve. Law firms have the data and resources to provide this information, they are just not communicating it in the right way to clients. Given how hard law firms work to keep their clients happy, improving the transparency of bills should be a no brainer for managing partners.
Data: Legalease Research Services surveys 300,000 commercial law firm clients each year. All scores are statistically validated (Bands of Uncertainty are marked within square brackets). Scores are Relative (not Absolute) and are Benchmarked against the average score of all clients for all client service criteria. For definitions and methodology see www.legaleasedata.com/faqs/. For scores of individual law firms (drilled-down into multiple work areas, and multiple jurisdictions), contact firstname.lastname@example.org