Five bases to charge business units for internal time

In February 2006, Mahlab Recruitment and Harris Cost Lawyers surveyed the members of the Australian Corporate Lawyers Association (ACLA). The survey found that almost a third of the law departments charge costs to their business units. About 17 percent charge by hourly bills at a single hourly rate; another 20 percent charge by hourly bills, but use different hourly rates for different lawyers (See my post of May 14, 2006 that disagrees with multiple rates.).

Some of those law departments (13%) charge back business units according to a percentage allocation based on time data; some 37 percent charge based on informal estimates of time, while 13 percent use other bases for charging (See my post of May 16, 2006 on the definition of “chargeable time.”).