A warped cost driver: outside counsel who put in long hours (big bills) and thereby get referrals

An off-hand remark by a partner, quoted in Of Counsel, Vol. 27, Feb. 2008 at 3, snapped me to attention. Kevin Newsom was describing his having been hired to handle a case for the Governor of Alabama that will be argued in the Supreme Court. Newsom remarked: “The best marketing I can do is to work myself silly on that case and do as good a job as I can.”

Aha! Big bills = big success = big book of business! One of the perverse drivers of legal costs is exactly this: If you log hour after hour and spend wads of your client’s money and do well, another client may hire you. The incentive is to work yourself silly – bill huge numbers of hours – and reap the rewards of marketing by referral. The first client, the one with the humongous bill, pays for your marketing.

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