If general counsels want to reduce outside counsel costs, they need to talk about the proverbial elephant in the room. The invisible elephant is how lawyers work. Costs are high because of how lawyers work, not how they bill for that work.
E-billing may save on administrative costs but misses the main point. Now watch out – here comes a mixed and mangled metaphor – e-billing is really just the elephant’s dung heap. Push around the dung, position it more neatly, maybe even pick a bit off the pile, and presto, the problem is gone. But it’s not; the elephant remains with an unending new supply.
To really lower costs, focus on how the dung gets there. Put that elephant on a diet by making lawyers work more efficiently and effectively. I have written about adopting best practices for lawyers and believe they could significantly reduce costs (for example, the use of checklists).
The white paper shows that e-billing adds costs and creates hassles for law firms. I have yet to see empirical evidence that client savings from e-billing exceed the extra costs incurred by firms. (The economist in me suspects that e-billing may add to rather than save total system cost.) I do believe, however, that if clients analyzed e-billing data cross-sectionally and longitudinally, they might uncover ways of reducing costs. What I hear anecdotally, however, suggests that few clients do so.
And if general counsels did this analysis, it would ultimately lead to adjustments in how lawyers actually work, not just changes in how they bill. So if clients are not going to analyze e-billing data, then why not just start with how lawyers work? Why not examine the actual means of practice rather than the small – or not so small heaps – that billing leaves behind?
Where are the bold GCs willing to talk about the elephant and take it head-on? I welcome being proven wrong: if anyone knows of published works or even anecdotes of significant and on-going net system savings from e-billing, please comment.