Can a law department estimate the cost of litigation-related time by employees outside the department?

A piece entitled Ten ’In-house Secrets For Reducing Your Company’s Legal Costs” appeared on Jan. 8, 2010 on the WikiCFO site. The author is, I believe, a lawyer with the Phillips Law Group.

I don’t think much of the article, but one of its ten secrets pushed me to write. Under the heading ”Calculate Your Company’s legal costs” it says, “This requires adding up all of your legal bills for the previous year AND estimating the cost of productive executive time lost due to involvement in, concern about, or management of legal issues.” Note the second cost estimate, after the AND.

No law department has come to my attention that attempts to estimate the costs of executives, let alone other employees, in depositions, discovery steps, strategy meetings, expert testimony or other legal-related costs. The numbers might be quite significant but their estimation would be quite subjective. Without them, for sure, Total Legal Costs fall short of Total.

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