Are you a legal professional? Visit our professional site

Small Firms Can Learn from DLA Piper 'Churn That Bill, Baby' Mess

Article Placeholder Image
By Robyn Hagan Cain on April 01, 2013 1:37 PM

Perhaps you've heard about DLA Piper's "churn that bill, baby" debacle.

Last week, the New York Times' Dealbook reported that internal correspondence from DLA Piper -- disclosed in a fee dispute between the firm and Adam H. Victor -- included casual quips about the firm's overbilling practices. DLA Piper attorneys joked in the emails, "I hear we are already 200k over our estimate -- that's Team DLA Piper!" and noted that the firm had "random people working full time on random research projects in standard 'churn that bill, baby!' mode."

Victor, who was not amused by his six-figure legal bill, claims that it's part of a "sweeping practice of overbilling." The firm released a memo in response to the Times piece, explaining "The emails were in fact an offensive and inexcusable effort at humor, but in no way reflect actual excessive billing. Instead, the reality of the matter is that the amount of fees billed by DLA Piper are consistent with the work performed."

So how did this attorney-client matter become public? DLA Piper sued Victor for $675,000 in unpaid legal bills. Victor responded by accusing the firm of overbilling. Then the firm's email messages came to light.

Similar tiffs frequently erupt between solo practitioners and their clients. The lawyer sues for unpaid legal bills, and the client countersues for excessive billing or malpractice. Suddenly, the media is airing your dirty laundry.

In Small Law, new clients frequently walk through the door thanks to word of mouth. Any long-term solo will tell you that the best thing a former client can say about you is that you did good work and charged a fair fee. That's usually enough for your former client's friends and family to consider you for their own legal needs.

Claims that you over-billed -- or worse yet, claims that you bragged about overbilling -- will scare clients away.

Before you sue a client for unpaid fees, take another opportunity to explain to your client how the fees were incurred and try to work out a payment plan. You might even consider reducing a client's bill to avoid the expense and potentially negative press from a lawsuit. One advantage SmallLaw has over GiantLaw is they really know and can really communicate to their clients. Give that a try first.

DLA Piper is one of the biggest, baddest firms on the block, so it can weather accusations of overbilling. A small firm or solo practitioner, on the other hand, is more likely to feel the burn of a "churn" public relations fiasco.

Related Resources: