Page 41 - CCCA63_2009

CCCA_V3No3_Col-Osler-FIN.qxd:CCCA_V1No2_Col-LabrEmpl-V1.qxd 9/16/09 10:18 AM Page 41 Legal Update – Osler Hoskin & Harcourt LLP The Paradox of Saving on Legal Costs Achieving greater certainty, engagement and value for your legal spend. here is a paradox of thrift in the current ation of unnecessary timekeepers and an integrated workspaces on their intranet for Tpush to treat legal services as non-essential increase in costs ( i.e. sub-delegation with- matter and client teams.These workspaces discretionary spending. If you do not hire a out consent or the engagement of addi- provide integrated and accessible informa- lawyer, or hire one without the requisite tional experts within the firm before they tion and resources about a matter or a client expertise, you may achieve short-term sav- are really needed). relationship, enabling matter and client ings, but you risk incurring a bigger legal bill teams to collaborate more efficiently with later on because you scrimped on diligence Set a budget each other and, ultimately, with clients. or negotiated without the benefit of experi- Estimating and billing technology has These workspaces also enable lawyers to enced counsel.By spending less up front,you evolved such that clients can reasonably monitor,in real time,the financial picture of may ultimately spend more. expect law firms to produce a good faith, a matter, including staffing profiles and fees The key to long-term cost-savings on carefully considered, detailed estimate of billed to date. legal fees is to get more for what you spend legal fees on every matter. An estimate – more certainty, more engagement and, should break down the tasks for each mat- Secure firm approvals ultimately, more value. This is possible ter as well as the expected hours and rates Some firms require approval from a second where clients and lawyers establish an for each timekeeper expected to work on it. partner with applicable subject-matter ongoing dialogue to address legal and Most firms have developed electronic expertise for a quotation or estimate that is budgetary needs, expectations and con- worksheets to help partners prepare fee above a certain threshold. In certain cir- straints, and where law firms use their quotations and estimates. Also, “matter cumstances, approval from the department resources to set realistic budgets that can be tracking” systems enable partners to easily chair and billing management is required. monitored and adjusted where necessary. identify the fees and disbursements charged These kinds of secondary approvals help These practices will reduce uncertainty and on previous comparable projects.This his- firms develop reasonable fee estimates and ensure that law firms deliver the value torical information can help law firms achieve consistency. expected by clients at an agreed price. develop realistic project estimates and iden- tify expertise and other resources required. Make adjustments where necessary Establish a dialogue Where circumstances change, a revised Law firms are willing to invest in client Deploy smart communications tools budget should (if possible) include suggest- relationships,dedicating time and resources Refinements in communications tools for ed ways to maintain the original budget. to understanding their clients’ businesses client fee quotations and estimates provide Where something needs to be done quick- and needs so that they can be proactive in partners with a framework for a detailed ly or is particularly complicated or impor- managing matters and in meeting and descriptions of the legal work required to tant, a cost increase may be unavoidable if exceeding their clients’legal and budgetary complete a matter, the related assumptions a more senior lawyer is needed. However, expectations.Clients can help by educating used to forecast legal costs and the circum- what can be avoided is surprise. Clients their law firms about their financial needs stances in which forecasted costs will be may reasonably expect the responsible and budget constraints so that firms can revisited. These descriptions help ensure partner to keep them posted on where the staff matters in a way that provides the best better client-firm communications about legal spend is relative to the budget, and value at a price that works within their fee estimates. Most firms also have auto- what the run rate is monthly, weekly or clients’ budget.This requires dialogue. matic notification systems that will notify even daily. Firms need to discuss with their clients, “matter” and “billing” responsible partners in detail, what they propose to do before when fees, disbursements and taxes reach a Mark Trachuk is a partner and the chair of the incurring any material fees. Clients, in certain percentage of a quotation or esti- corporate practice group at Osler Hoskin & turn, should be clear about their cost con- mate so they can easily monitor where the Harcourt LLP.He practises corporate and securities straints and expectations, and identify and spend is relative to budget. law with a focus on mergers, acquisitions and restrict practices that encourage a prolifer- Many firms have the ability to construct restructurings. (mtrachuk@osler.com) AUTOMNE 2009 CCCA Canadian Corporate Counsel Association 41