Law departments can’t directly track all costs that the company incurs for legal services

A law department is the beneficiary of many shared corporate services, yet never gets billed for them. The largest item would be a rental equivalent, at market rates. Reception areas and receptionists, security personnel, shuttle buses, mail room, IT infrastructure spending, the company holiday party, a subsidized cafeteria, snow removal from parking places, company library, severance costs, corporate training programs, corporate sponsorship fees

Chasing down every subsidy would be impossible, and unlikely even in the aggregate to raise the fully-loaded cost per lawyer hour more than 10 or 15 dollars – perhaps. No one has produced a study of such costs, absorbed by a company and not part of the law department’s budget. What matters is that law firms have to pay for them.

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