Reply to Explain to me like I’m five. What do “Big Law” lawyers do?

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[quote=Anonymous][quote=Anonymous]When large cooperations hire a law firm, how often do they penny pinch?

For example, how much thought is given to …eh, let’s go another round of patent prosecution for these 100 patent pending applications.

[/quote]

They penny pinch a ton. First, on the actual bills. There are whole companies devoted to examining big law firm invoices on behalf of clients in exchange for a portion of the savings. Coming to you like, "these bills show that three people attended a status conference at the court on August 19 and billed for it. But our contract says that only [i]two [/i]people can attend a court hearing. We won't pay any of this invoice until the whole thing is revised." More subtly, they just push back. "Did it really take 40 hours to write that motion?" and the partner dutifully knocks off a few thousand.

Second, they penny pinch on the up-front rates. Huge clients don't pay the "rack" hourly rate and get frequent discounts backed into their engagement letters. "Thanks for pitching to handle that case for us. But if you want to work for Amazon, we'll need 15% off." And the big firms give those discounts regularly. Some engagements even stipulate that the attorneys' rates will be frozen at current-year levels through the length of the engagement. In litigation, that could be years, even though the firms are trying to raise everyone's hourly rate every year.

Third, they penny pinch by not paying on time. Big law partners are frequently having to hound clients -- 30, 60, 90 days after invoices -- to get a check. That's from top-tier, Fortune 500 clients. It's not because the clients don't have the money, it's because they have all the leverage with the firms doing their work. And even if it says otherwise in the contract, don't think that you can act like a slumlord and start charging them a penalty for late payments. You try that and you aren't getting the next matter from them.[/quote]

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