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Don’t obsess over disbursements by law firms

Most outside counsel guidelines devote a disproportionate amount of costs and energy to law firm disbursements, disproportionate because the out-of-pocket expenditures by law firms that clients pay for are typically less than ten percent of the total bill. That attention is misguided.

“Show me the money” directs us properly to focus on fees, not faxes (See my posts of Sept. 13, 2006 and Oct. 24, 2005 on fixed fees and their inclusion of disbursements; Sept. 13, 2005 and online legal research costs; May 31, 2005 and disbursements in Canadian law suits; April 18, 2005 and May 30, 2006 on the cottage industries that give rise to disbursements; and Aug. 20, 2006 for how law departments can negotiate cost reductions with vendors.). Only in egregious circumstances – recall the infamous Skaddenomics – should a law department squander its resources on disbursements.