More management scrutiny of legal costs when those fees must be expensed starting in 2009

An article by Ben Heineman, Jr., in Corp. Counsel, Vol. 15, Nov. 2008 at 92, explains that under new accounting rules that will take effect in 2009, legal costs incurred as part of deals will have to be expensed immediately, not capitalized over a period of years.

Financial Accounting Standards Board rule (FAS 141(R)) will force general counsel to manage outside counsel costs even more closely, because they will not be able to say, “Oh, the fees don’t matter since they are rolled into the transaction.”