No overhead charges for contract attorneys or temps, according to GE

I have opposed surcharges by law firms for staff (attorneys and paralegals) they hire for specific projects (See my post of Feb. 16, 2007: American Lawyer survey of law firms on markups of contract attorneys; Feb. 18, 2007: NY State Bar opinion; March 11, 2007: arguments for marked-up expenses of temps; and Dec. 9, 2008: contract lawyers for litigation review – high markups and low productivity.).

General Electric also prohibits markups, at least based on what Brackett Denniston and Alex Dimitrief wrote when they updated the chapter on billing in Bob Haig’s Successful Partnering series.

“We believe that, absent an express agreement to the contrary, a firm should bill a client only the costs incurred by a firm in retaining contract attorneys plus associated overhead (such as off-site office space specially rented to house the team of contract lawyers).” This limitation on overhead top-offs, I submit, should apply to all expenses and disbursements by firms: no additional costs.

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