24 ASIAN LEGAL BUSINESS – AUGUST 2023 WWW.LEGALBUSINESSONLINE.COM CLIENT EXPERIENCE where we collaborated with excellent firms, often affiliated with international counterparts. The engagement was comprehensive, involving all three tiers of the firm – partners, senior associates, and associates – who were intricately involved in the details. This level of commitment reflects their dedication to providing high-quality service, resulting in exceptional outcomes. However, upon reviewing the timesheets, we found instances, where there were double or even triple billings on simple and straight forward matters, senior associates devoted two hours to reviewing it, and two partners allocating another hour for re-evaluation. Puzzled by this approach, I discussed it with the relationship partner, questioning the rationale behind such extensive billing.” Harahap adds, “In certain cases, local counsel occasionally requests additional time to conduct necessary on site research or matters that they are not familiar with. However, these instances often result in charging substantial billable hours for what could easily be addressed by mixing a cap of reasonable billable hours and have the residual hours spent be inputted as investment time. Alternatively I could arrange for members of my in-house legal team do the exact same research.” The unnamed Singapore GC concurs. “The associates do an X number of hours, and then you have a Y number of hours where the partner reviews the work. To me, I always cannot understand. I don’t care if your team A, B or C review it. This is a very old-school way of working.” Simundac-Delos Santos says that what has been helpful for her is to lay down ground rules with the law firm. For example, requesting that only the decision maker attend the call with them or with the client, unless necessary. If the team’s presence is preferred, then they will just be paying for one. Moreover, the Manila-based GC says, “Several law firms that I worked with do not bill the out-of-pocket expenses at the same time as when they bill the time charges. They bill only the hourly time charges and you pay it thinking you are done. Then after a few months, they will send you another bill for the out-of-pocket expenses that they incurred for that work.” With dissatisfaction brewing with the hourly billing model, there’ve been growing debates about reforming the fee structures at law firms. But Stanley Park, a Singapore-based independent consultant who used to helm the legal departments in several financial institutions, thinks finding a viable alternative is even harder. For corporate transactions, Park believes one of the biggest challenges many law firms have is the competitive need to provide an essentially fixed pricing. “Some of the most negative experiences I had with law firms is when they mismanage their resources and the time that’s going into the matter. This resulted in them either blowing up their budget or ending up billing us for far more than we expected, which led to resentment and unpleasantness, even anger, within the financial institution; or they were upset, because they were getting paid not as much they should be paid,” says Park. What made matters worse is when firms slapped the bloated legal bill on the in-house teams on the exact day of billing. “You can’t show up on our doorstep on the day billing with an amount that’s twice as much as we expected. We may not go back to the firm again because we can’t trust their estimate, their word, or their judgement,” notes Park. Park faults competition between law firms as the cause of the mismatch between the estimates that are given, and the actual amount billed. “When clients are requesting two or more bids or bids from two or more law firms, each law firm has an incentive to lowball the amount that they expect to bill in order to win the deal.” Harahap, on the other hand, leans towards the “fee cap” approach. He elaborates, “In instances where the required work might amount to around 10 hours, I generally grant the firm the autonomy to determine their approach and set a cap accordingly. This is typically our modus operandi. If the engagement extends beyond initial estimates, we engage in further discussions to mutually agree on a reasonable arrangement. In my view, this represents the optimal approach to structuring fees. However, whenever I see that firms go above and beyond on complex issues, I would definitely stand by any of their uplifts.” And there are steps that law firms can immediately take to improve the perceived deplorable state of billing arrangements. “Technology is a good “Some of the most negative experiences I had with law firms is when they mismanage their resources and the time that is going into the matter. This resulted in them either blowing up their budget or ending up billing us for far more than we expected, which led to resentment and unpleasantness, even anger, within the financial institution; or they were upset, because they were getting paid not as much they should be paid. We may not go back to the firm again because we can’t trust their estimate, their word, or their judgement.” — Stanley Park, former senior in-house counsel
RkJQdWJsaXNoZXIy MjA0NzE4Mw==