Unrealistic to demand that law firms charge “actual costs” for internal disbursements

Law departments require in their outside counsel guidelines that firms charge them no more than the firms’ “actual costs” of photocopies, faxes, messengers and other internal costs. That limit sounds definitive, but it is nearly impossible for law firms to calculate the actual cost of any of those tasks. To ask, “What is the fully-loaded costs of binding a brief?” is to bare the absurdity of the question.

What law departments want is to eliminate surcharges by law firms, premiums of some deliberate amount or percentage on top of whatever the cost may be of a task. One solution is to ask your key firms to describe in writing how they calculate the internal costs charged to you

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