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Want proof that human beings can transmute into fire-breathing dragons? Just ask general counsel about the most outrageous bills they’ve received from firms. John McGuckin, executive vice president, general counsel, and secretary of Union Bank of California, was billed for overdue book charges from the Los Angeles County Law Library. “I called and questioned the bill and the billing partner wouldn’t budge. I haven’t used the firm since,” says McGuckin, who is chair of the board of directors of the Association of Corporate Counsel. Jeffrey Carr, vice president, general counsel, and secretary of FMC Technologies Inc., sizzles at the “absolute audacity” of firms that try to pass through overhead charges. He refuses to pay copy fees of 25 cents a page, “when real cost is pennies,” or “computer-assisted research when they pay flat fees for unlimited usage.” Michael Fricklas, executive vice president, general counsel, and secretary of Viacom Inc., still recalls “the firm that billed us for their computer service desk and secretarial time.” Mark Chandler, vice president, legal services, and general counsel of Cisco Systems Inc., resents bills for petty items such as faxes, and for travel expenditures that violate Cisco’s travel policies. So much so that Cisco has moved “80 percent of our work to a non-billable-hour basis,” and uses e-billing tools to track expenses. TOO MUCH OVERKILL Barry Nagler, senior vice president and general counsel at Hasbro Inc., recalls a bill for representation in a minor matter in a distant city. It needed only a single attorney, yet the company was billed for three lawyers, who all traveled first class. “Our outside counsel retention policy made it clear that we would only reimburse for coach travel, and further warned against overlawyering,” says Nagler. The firm got no further business from him. FMC’s Carr hates bills for work done by first- to third-year associates. “Generally little they do is actually useful to the client,” he says. His most outrageous bill: for expert fees, for work done after a case was settled. “Especially because the expert’s fees were more than the law firm’s fees.” Nothing annoys GCs more than firms that give themselves bonuses. A Fortune 100 GC says he was furious when, “after paying a high (and undiscounted) hourly rate for a trial that we lost (but eventually settled), a firm arbitrarily added a bonus to the bill for good results.” William Lipsman, now executive vice president, general counsel, and secretary of the OSI Group, recalls a bill he received when working for another company. It was for representation during an uncontested takeover of a public company, and it added a “success fee” bonus of 30 percent. “Would they have accepted a reduction in fees if the uncontested deal did not close? We did not pay the success fee and did not use the firm again,” he says. One San Francisco Bay area GC still bristles about “the partner at a global firm, who would typically bill 0.3 or 0.5 hours for notifying a partner at another of the firm’s offices that I would be calling to seek assistance.” But the grand prize for arrogance may go to Berkeley, Calif., lawyer Alan Kalmanoff, who slapped the city of Cincinnati with a $132,492 bill for a few weeks’ work monitoring the city’s police department. It included charges for tipping hotel maids, running errands, meeting with the manager of the hotel, and having someone pack his suitcase. He ultimately was paid $91,597 and was forced to resign, but as of July, was still asking a federal court for another $37,000, reports The Cincinnati Enquirer. NO MARKUP “All costs should be charged at actual, out-of-pocket levels, with no markup whatsoever,” says Hasbro’s Nagler. “Few things engender more frustration and hostility from in-house counsel than an outside firm that is trying to use disbursements as a profit center,” he says. “Marking up expenses, in a direct or indirect way, is akin to double-dipping and, moreover, seems inherently sneaky.” Theodore Banks, associate general counsel of Kraft Foods Global Inc., says bills should contain no surprises, and firms should discuss costs policies in advance. “Charging for overtime costs may be appropriate in some cases, but not because the attorney left everything to the last minute. And certainly no double-billing � charging for travel while doing work for other clients.” Says McGuckin: “When in doubt, don’t bill it, especially if the final bill for legal services has already been sent.” Monica Bay is editorial director of the ALM magazine Law Firm Inc. , where this article originally appeared.

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