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PROBLEM SOLVERS

PROBLEM SOLVERS. CONTROLLING LITIGATION COSTS. 505 North 20 th Street Birmingham, Alabama 35203 Telephone : 205-795-6658 csattorneys.com. HISTORY OF BILLING FOR LEGAL SERVICES. Billing process before timekeeping Flat fee Estimate of fairness.

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PROBLEM SOLVERS

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  1. PROBLEM SOLVERS CONTROLLING LITIGATION COSTS 505 North 20th Street Birmingham, Alabama 35203 Telephone: 205-795-6658csattorneys.com

  2. HISTORY OF BILLING FOR LEGAL SERVICES • Billing process before timekeeping • Flat fee • Estimate of fairness

  3. HISTORY OF BILLING FOR LEGAL SERVICES • Advent of Timekeeping • Captured items not previously billed • More time required on more complex cases • One inch file v. file occupying a room

  4. HISTORY OF BILLING FOR LEGAL SERVICES • Increase in law firm overhead • Advent of technology and associated cost • Associate and legal staff salaries • Health insurance

  5. PROBLEM SOLVERS: CONTROLLING LITIGATION COSTS • LEGAL FEES ARE A PRODUCT OF TIME AND RATES

  6. LEGAL FEES ARE A PRODUCT OF TIME AND RATES • Reduce time spent on case • Early case disposal • Claims’ personnel make contact with attorney to request assistance in evaluating case for settlement before lawsuit is filed. • Jurisdiction where suit will be filed • Judges • Jury pool • Case backlog • Plaintiff’s attorney’s ability and connections in jurisdiction • Need to associate local counsel

  7. LEGAL FEES ARE A PRODUCT OF TIME AND RATES • If claim adjuster cannot settle, engage attorney to: • Negotiate with plaintiff’s attorney • Schedule pre-suit mediation • Use of retainer letters to reduce time case is in litigation • State hourly rate to be paid for legal services of partners, associates and paralegals • Require efforts to reach early settlement • Require procurement of all necessary information to evaluate case within specified period of time - deadline • Agree only to pay normal and reasonable expenses • Agree to frequency of billing

  8. LEGAL FEES ARE A PRODUCT OF TIME AND RATES • Ways to reduce rates • Fixed fee arrangements • What is purpose - reduce fees and expenses • What cases do they work in • Cases where cost is predictable • Problems – • How much risk can a lawyer afford to take • Who is managing work performed on case – lawyer or client? Is client willing to relinquish decision making regarding defense to lawyer?

  9. LEGAL FEES ARE A PRODUCT OF TIME AND RATES • Renegotiation of fee as case develops • By client - case settles in a week • By lawyer - case lasts forever, unanticipated work • Will not work without mutual trust

  10. LEGAL FEES ARE A PRODUCT OF TIME AND RATES • Alternative fee arrangements • Bonus v. Penalty based on date of disposition - the longer a case is pending the higher the attorney’s fee • Establish procedure to pay bonus based on percentage of attorney’s fee billed at time of settlement if case settled within designated time period (12-18 months) • Reduce hourly rate if case not settled or tried at first trial setting

  11. LEGAL FEES ARE A PRODUCT OF TIME AND RATES • Contingent fee arrangement • Establish settlement value of case • Deduct amount of settlement or verdict there from • Allow percentage bonus based on savings • Problems - • Agreement on settlement value - client (low) v. lawyer (high) (creates distrust at each stage of case) • Percent of bonus • Verdict or settlement in excess of agreed settlement value • What is the incentive to the client - since the client only benefits if there is a good result

  12. LITIGATION GUIDELINES • Purpose - Encourage and promote early settlement and reduce attorney’s fees and expenses

  13. WHAT CLIENT SHOULD DO • Be selective in attorney you hire • Know they are trustworthy • Ask for their help in controlling costs • Know in advance what their rates are • Give all of your work to one law firm in any jurisdiction – makes you more important to law firm as a client • Discuss the billing practices with your attorney • Call attorney over any problem on the bill and ask for explanation

  14. WHAT LAWYERS SHOULD DO • Provide settlement evaluations as required by litigation guidelines and update evaluations as the case progresses. • Explain in detail the reasons for changes in your evaluation and provide exhibits, video depositions, or anything else that supports your changed evaluation.

  15. WHAT LAWYERS SHOULD DO • Do everything you can do to resolve the case at the earliest possible time, as is appropriate and in the best interest of your client. • This will save both you and the client valuable time and resources. • Make sure your client knows that you are working to handle the case efficiently and effectively.

  16. WHAT LAWYERS SHOULD DO • Be honest with your billing. • Describe the work you do on your time sheet so the client understands what: • what you did • why you did it • how the client benefited from the work • Bear in mind that some items may not warrant a charge and should be designated as “no charge.”

  17. WHAT LAWYERS SHOULD DO • Diplomatically and tactfully make suggestions about better practices your client could employ.

  18. WHAT LAWYERS SHOULD DO • Let your clients know they are important to you and your firm.

  19. PROBLEM SOLVERS 505 North 20th Street Birmingham, Alabama 35203 Telephone: 205-795-6658csattorneys.com

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