Optimal Legal Staff Utilization: Client Involvement is Key

December 29, 2023

Clients often rely on their contact attorney at a law firm to make decisions regarding who will handle day-to-day activities in a new legal assignment. Generally, client case management and billing guidelines require that these persons be identified upon acceptance of assignment. The process for changes in the initial staffing is usually addressed in client guidelines as well. What is often not specifically addressed is what happens during the life of a case in terms of the roles of each professional and how each is utilized.

Courts have long held that it is wasteful to use highly skilled and highly priced talent for matters easily delegated to less experienced associates, paralegals, or non-professionals. Judges have stated in opinions in fee cases that if senior partners choose to not delegate tasks, the tasks should be billed, if billable at all, at the rate of the staff member whose skill level is necessary for the task.

In court decisions, judges routinely decrease partner rates to associate rates for tasks requiring only an associate skill level. Attorney rates are reduced by judges to paralegal rates when the task justifies a paralegal skill level. Additionally, if professionals bill for tasks routinely handled by legal secretaries, technical support staff, document clerks, or calendar clerks, for example, the rate will be disallowed completely as these personnel are part of a law firm’s overhead and their time is not billable. The cost of such personnel is already factored into the hourly rate agreements or other fee structures agreed to between a client and a law firm.

It is reasonable that a client asks what the role of each proposed staff member will be and can expect that the tasks they handle and bill for will be in-line with their position at the firm and purported skill level. It is also reasonable for a client to expect that work will be delegated appropriately and cost effectively. Unfortunately, if the client or the client representative elects to distance themselves from the firm’s staffing decisions once the case is assigned, there is little incentive for the firm to make cost effective decisions. This can contribute to unnecessarily costly legal spending.

Monitoring law firms' invoices allows corporations and insurers to stay involved in their staff utilization practice, and ensure that work delegation remains reasonable and cost-effective.

In situations wherein a firm chooses not to hire paralegals, that is the firm’s choice, but ultimately paralegal level work should only be billed at reasonable paralegal rates, regardless of an attorney handling the tasks. Also, some firms do not choose to hire legal secretaries but use paralegals to handle tasks that are routinely taken care of by legal secretaries, thereby justifying billing them to a client simply because a paralegal is doing the work. Courts have consistently held that the nature of the task determines the skill necessary to handle it effectively, not the position of the person handling it.

Asking questions is not overreaching. Clients should avoid deferring completely to a panel law firm on staffing decisions. Clients or their representatives should vet all proposed staff and gain a comfort level with each staff member’s skill and experience level. Conversely, the assigned staff must gain an understanding of the client’s expectations and case management philosophy. All of this comes about through making the best initial staffing decisions and assuring that staff are being used effectively and appropriately during the life of a case.

Monitoring of the law firm’s invoices is a critical part of the process of staying involved in the law firm’s staff utilization practice and assuring that work delegation is reasonable, cost effective, and in the client’s best interest. There is an often-quoted comment from a Federal District Court Judge that is on point: “A Michaelangelo should not charge Sistine Chapel rates for painting a farmer’s barn.”

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