Allocatur

Do In-House Counsel Charge Other Business Units?

78.4% of Australian in-house counsel do not track internal legal costs - therefore most costs are not passed back to other business units. Only 6% of Australian in-house counsel charge business units, and if they do, costs are generally based on an estimate rather than on time actually spent. Tracking internal legal costs is one way of demonstrating value of the legal department - if this work was not undertaken by the in-house department, significantly greater costs would have been incurred with external lawyers. Rees Morrison has an interesting post about the New York City in house law department sending hypothetical bills to all the City departments it represents. Both demonstrating value, but also a way of encouraging efficiency in the use of the law department. This could also be used to show how a lack of communication within a corporation about business activities can increase costs in the corporation. (see my previous post on pressing business issues).

What do Corporate Counsel want from their Lawyers?

In conjunction with Mahlab Recruitment, my law firm, Harris Cost Lawyers, has recently conducted a survey of members of ACLA (Australian Corporate Lawyers Association) about their relationship with external law firms. In the next few posts, I will look at particular results, with some comment on comparable overseas findings. The full survey results are available at www.harcosts.com or www.mahlab.com.au.

Approximately 1800 corporate counsel members of ACLA asked to respond to the survey, which was made available by ACLA in March 2006. Responses were predominantly from New South Wales (37%) and Melbourne (36%) with the major industry areas represented being Banking and Finance and Energy and Resources.

Respondents were asked what the most pressing business issue was. Number one was reducing the external legal spend, but keeping apprised of other corporate activities that might have legal implications also rated highly. These reflect the combined pressures of financial constraints and increased regulation and compliance.

Why Allocatur?

Why Allocatur? - originally a medieval latin word meaning "it is allowed". Now a legal term most commonly used in relation to allowances of lawyer's fees and expenses.

Why have I chosen this title?

Much of my life as a lawyer has been spent in the arcane world of "taxation of costs" - a area of law where the costs of lawyers are examined in all their minutiae. The costs to be allowed to the lawyer against his client, or to a successful party against an unsuccessful party, is what is set out in the "allocatur". But this blog is more than simply about legal costs. It will cover all aspects of practice management for lawyers, because the examination of legal costs involves an examination of how lawyers do their job.

How they do their job depends on factors ranging from how they relate to the client, to how they run their practices, from how they manage their time to what technology they use, and whether the six minute unit controls their life or is only a tool to be used.