I think there's a place for SimpleLegal and services like it, but when it comes to managing professional service fees, some things are worth pointing out:
1. In many cases, clients have themselves to blame for "unnecessary" costs. Lots of clients fail to educate themselves on legal issues before they engage with their attorneys, so interactions are lengthier than they need be, and often some work that clients can do themselves (organization and preparation of materials, etc.) gets offloaded to the law firm. Many costly litigation matters arise because clients aren't proactive on the prevention front.
2. Clients often choose the wrong providers. The OP writes:
"Buried in those 200 pages were charges from a law student. It wasn't much. But charging over $200/hr for someone less than halfway through law school is one of those self-inflicted image hits that's tough to stomach."
If you use a large, full-service law firm, you should not be at all surprised that a summer associate billed against a matter. Do some clients push back on summer associate hours? Sure. But if you expect an experienced attorney to perform all of the work for you and you have a low tolerance for summer associate time billed at substantially less than what you would pay for even a mid-level associate, you should probably not be using a large, full-service law firm in the first place.
3. Ultimately, if you do not trust your law firm or are not comfortable with the relationship between the cost of services and the value you receive, you should find a new firm. Unless you're a multinational corporation that purchases ungodly amounts of services from a firm and thus has significant leverage, you absolutely do not want to be known as the stingy client who is always complaining about cost.
Bottom line: if you're not thoughtful about how you consume legal services, scrutinizing your bills is not the most effective use of your time.
Post author here. Definitely agree that clients should take time to educate themselves. That's actually the point of the post and the point of reviewing the bill. We can't all start off knowing everything.
Hopefully being able to forecast legal expense is part of that learning process. In this case, the client was able to separate the one-time from the ongoing legal spend.
Reviewing your bill is great way to make better decisions in the future. The point in the post about investor-driven costs is a good example of something they can do differently the next time around. Hopefully it's also something that startup founders reading the post can be proactive about.
The post was not meant to be anti-lawyer in any way. I know much of the commentary around law firms turns out that way. But it's certainly not my intent.
> The post was not meant to be anti-lawyer in any way. I know much of the commentary around law firms turns out that way.
FWIW, I don't think you come across this way at all. Also, I think there is value to your product from the point of view of lawyers as well. At large law firms, realization hovers around 85% (i.e. they collect $0.85 for every dollar billed). Clients who are better informed about what they're getting billed for and who have more trust in their bills are probably less likely to just arbitrarily not pay part of it.
Not only do law firms have trouble collecting 100% of billed, they aren't able to bill 100% of their standard rates. [0]
The same partner that made the talking/billing comment believes that part of the problem is the amount of time between receiving the service and paying for the service.
Our legal billing API should help fix that problem, too.
"you should not be at all surprised that a summer associate billed against a matter"
"you should probably not be using a large, full-service law firm"
"you should find a new firm"
I think a lot of what SimpleLegal is trying to do is eliminate a lot of these information-dependent "shoulds", and replace them with simple clarity instead.
Hiring a large, full-service law firm and being surprised by the fact that a summer associate billed against your matter or that phone calls with investors weren't handled gratis is like buying a Ferrari and expressing shock when your mechanic informs you that the F1 clutch needs to be replaced and will set you back $5,000.
A service like SimpleLegal could be very useful for larger companies with consistent, significant legal spend because at these companies, spend on external professional services is almost always managed and reviewed to begin with. For smaller companies (startups included) with much lower spend and more infrequent use of services, there's never going to be a remedy for "I bought a Ferrari and didn't know the maintenance costs were going to be so high!" People who educate themselves on what they're buying before they buy almost always come out ahead of those who don't.
Its startling how generalizable to other specialties that advice is - web design, marketing, analytics, online advertising - that advice above applies to _most_ of the businesses I've worked for/with in the last decade…
This kind of post hoc analysis may be useful for folks who didn't know or realize what kind of firm it was that they retained in the first place when the matter began, and so are, if not objectively, at least subjectively "entrenched" with that firm.
There is probably a point where such analysis costs more than the cost of switching to a firm that can be trusted.
1. In many cases, clients have themselves to blame for "unnecessary" costs. Lots of clients fail to educate themselves on legal issues before they engage with their attorneys, so interactions are lengthier than they need be, and often some work that clients can do themselves (organization and preparation of materials, etc.) gets offloaded to the law firm. Many costly litigation matters arise because clients aren't proactive on the prevention front.
2. Clients often choose the wrong providers. The OP writes:
"Buried in those 200 pages were charges from a law student. It wasn't much. But charging over $200/hr for someone less than halfway through law school is one of those self-inflicted image hits that's tough to stomach."
If you use a large, full-service law firm, you should not be at all surprised that a summer associate billed against a matter. Do some clients push back on summer associate hours? Sure. But if you expect an experienced attorney to perform all of the work for you and you have a low tolerance for summer associate time billed at substantially less than what you would pay for even a mid-level associate, you should probably not be using a large, full-service law firm in the first place.
3. Ultimately, if you do not trust your law firm or are not comfortable with the relationship between the cost of services and the value you receive, you should find a new firm. Unless you're a multinational corporation that purchases ungodly amounts of services from a firm and thus has significant leverage, you absolutely do not want to be known as the stingy client who is always complaining about cost.
Bottom line: if you're not thoughtful about how you consume legal services, scrutinizing your bills is not the most effective use of your time.