Law Department Management Blog
By “dormancy months” I mean months where the amounts billed by law firms are much less than the average monthly billings over the lifetime of a case, such as 20 percent or less. For example, if a case lasts 36 months, and costs $3.6 million in legal fees and expenses, the average monthly burn rate is $100,000. A month where $20,000 or less is billed would be considered under this definition a quiet month, a dormant month.
If a law department calculates for each of its major lawsuits the percentage of dormant months, could useful conclusions to be drawn? Months of low activity might show that some courts are clogged, or that some plaintiff’s lawyers engage in spurts of activities. A high percentage might show that the in-house litigation manager is not being aggressive about resolving the case. Knowledge of patterns might help the in-house lawyer budget more precisely as the litigation struggle ebbs and flows. Even so, it is far from clear to me that the dormancy ratio has much to offer, unless a department could share comparable data with other law departments.