Although law firms are typically based on profitable business models, even the legal industry is suffering setbacks by the current economic pinch.

What is interesting is how law firms are handling the changing economic landscape – especially in light of their reputation of offering professional luxury to clients, associates and partners.

Above the Law reports that even one of the country’s largest legal outfits is concerned about slimming profit margins. They have a blog post copying a memorandum sent to the Locke Lord Bissell & Liddell staff, whereby Locke Lord changes its policy and requires Loislaw to be used instead of Lexis Nexis or Westlaw to conduct legal research.

Loislaw is simply a more inexpensive online legal researching tool than Lexis Nexis or Westlaw. If you’re famliar with Lexis or Westlaw, you know that their prices can be outrageous.

What is funny about Locke Lord’s memorandum is that they are asking the firm to use a cheaper research tool whenever operating on the firm’s nickle, but have no such requirement when operating on the client’s nickle. The memorandum states:

All non-billable legal research involving case law, statutes or regulations at both the state and federal level should first be performed using Loislaw. * Loislaw should also be used for billable research where appropriate, resulting in a much lower cost to the client. * If additional research is required on Lexis or Westlaw that research must be billed to a client/matter.

It’s interesting that one firm’s solution to their economical troubles is to shift the costs onto their clients.

Charging for legal research is simply an antique mode of operation by law firms, as is charging clients for copies, telephone calls, stamps, faxes, and everything else under the sun.

In 2009, with Voice-over IP, e-faxing and the importance of having documents scanned instead of copied…most of these charges shouldn’t even exist!

Many law firms and lawyers have abandoned the practice of nickel and diming their clients, just flat out rejecting that firms should charge for these expenses. Patrick Lamb publishes an entire blog on the subject (alternative fees).

Smiley Law Group doesn’t nickle and dime its clients. Postage, copies, ink, smiles, phone calls, faxing, legal research, and every other administrative expense is paid by clients though a modest 3% administration charge on each invoice.

Even if a client bill is $10,000.00, the $300 charge is a fraction of what spending one hour on Lexis Nexis could cost if billed directly.

We hope to buck traditional attorney billing practices even more in the coming weeks and months by offering clients flat fees and alternative billing arrangments for our services. Our progress in this area, and how the difference may be better for your construction company, will be reported right here on the Smiley Law Rocks website. Stay tuned.

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