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Law firm fixed surcharges increase in popularity among law firms

Research by Tom Collins of Juris has found that law firms appear to be moving away from specific recovery of soft cost transactions such as internal copying, faxing and even phone service. Some simply consider those costs to be covered by the law firm’s service fees. Other law firms, however, have implemented a surcharge on professional services fees.

Let me quote from the post on Juris’ site: “Numerous firms have implemented such charges—generally between 3 and 5% of fees. This typically covers all soft costs (fax, copies, postage, etc.). The firms with surcharges higher in the range (for example those charging 5%) included express and courier delivery such as FedEx ® as items covered by the surcharge. Firms usually labeled the new fee item as an “administrative charge.” Implementation starts by including the charge in their engagement letter along with a clear explanation.”

Law departments should do their own study to decide the fairness of these bundled fees. Certainly, departments will lose detailed information about vendors and costs if they accept a single charge.