Why not ask the client?

 As I said the other day, I’m in New York for LegalTech next week.  I’m coming in Sunday the 30th and leaving on Wednesday.  If you would like to get together, drop me a line.

I was looking at the list of presentations and found this gem:

Cost Recovery: How To Effectively Recover Client Costs:
As costs associated with Internet- and equipment-based client services continue to pile up for law firms, technology is keeping pace to help firms recoup these costs and prevent an adverse effect on profitability. Effective cost recovery systems must manage these billable charges – everything from Internet research to printer, fax, phone and copier activity – from the minute they’re incurred all the way through billing and reimbursement. This session explores what law firms should look for when selecting a cost recovery system, with an emphasis on intuitive, easy-to-use hardware options, seamless integration with financial systems and elimination of administrative headaches.

In my firm, we don’t charge for copies, faxes, or phone calls.  Maybe at this presentation, I’ll learn how to turn my normal overhead into thousands of dollars of profit.  I’m sure my clients will love me for it — especially if I tell them I am using “intuitive” and “easy-to-use” hardware that “seamlessly integrates” with my financial systems and “eliminates my administrative headaches.”

6 Responses to Why not ask the client?
  1. Michael Sherman
    January 20, 2005 | 11:32 am

    I’m with you Matt. We don’t charge for in house costs either. I consider it a cost of doing business and consider it in setting my flat fees. I recently had a client retain me after having worked with an hourly lawyer for several months. In discussing with her why she wanted to change lawyers (which I was trying to talk her out of) one of her complaints was the charges for copies and faxes (.25 per page)!! How profitable is it when the practice leads to (a) clients that fire you and go to another firm, (b) prospective clients that don’t hire you in the first place because of the practice, or (c) diminished reputation as a result of former clients complaining to whoever listens about how much you charged them for a copy? It seems to me that we should be concerned less with coss recovery systems and more with client service systems (e.g. extra-nets, document assembly software, online collaboration, etc.)

  2. Jim Logan
    January 20, 2005 | 1:42 pm

    Great post!

    I’m not a member of the legal profession, I’m a business person. When I read information such as you shared I vacillate between anger and condescending humor.

    From the perspective of business, law firms are professional service organizations – for profit businesses providing services for a fee. The services provided in this case are strategic and necessary…a formula ripe for abuse.

    I can’t think of any business other than legal where you are asked to pay for G&A twice – once within the rate of the timekeeper and a second time as a line item on an invoice listed as an expense. To make G&A a profit center in beyond words.

  3. The Newest Industry
    January 20, 2005 | 9:32 pm

    Cost Recovery for the Unrecoverable

    The non-billable hour has this great post on the idea of recovering costs for items such as printers, faxes, phones, etc. Oh this is nice. What a great way to get your customers to come back to you. Lets bill

  4. The Wired GC
    January 21, 2005 | 7:22 am

    Nickel and Dimed

    Matthew Homann makes a great point in the[non]billable hour about law firm client cost recovery. He mentions a presentation at the upcoming LegalTech that will cover many items to charge back to clients:

    Effective cost recovery systems must manage…

  5. Gil Friend
    January 24, 2005 | 3:26 pm

    We gave this up long ago too. In addition to the stated and obvious reasons, it’s an enormous waste of time and resources to have to keep track of that minutae; eyes utterly off the ball.

  6. Jim Logan
    February 10, 2005 | 12:50 pm

    Matthew, did you happen to attend this workshop or know anyone that did? I’d love to hear any feedback…


Leave a Reply

Wanting to leave an <em>phasis on your comment?

Trackback URL http://www.nonbillablehour.com/2005/01/why_not_ask_the.html/trackback