Low monthly spending limits, without prior authorization, keep a tight leash on outside counsel

Among the 75 cost-cutting ideas in the ACC Docket, Vol. 27, March 2009 at 42, is a method instituted by one contributor to the collection. “We have recently implemented additional billing guidelines. We continue to require monthly billing, but outside counsel must also obtain authorization to exceed $4,000 in a monthly billing period.”

Since that is only ten or so hours billed in a month, this tight leash is more a choke collar. I assume that $4,000 trigger level applies per matter and, obviously, you could set cap levels differently for various kinds of matters (See my post of March 4, 2008: spending minima for matter budgets; and March 25, 2008: a dozen thoughts about single-matter budgets.).

This imposition on law firms will require them to have a time and billing system that flags when a matter nears its cap. Conversely, the law department’s expense control software ought to have some way to nab violators. Both sides take on quite an administrative burden.

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