Cost recovery has always been a controversial area of law firm billing. Law firms incur tremendous administrative costs in servicing their clients, and yet clients are generally resistant, if not hostile, to the idea of these costs being billed back to them. Especially given the current economic crisis, law firms are having to justify their fees and costs more than ever before, so they need tools and data to help them demonstrate that their rates are fair and competitive.
In working with law firms since 1997, consultants Mattern & Associates noticed that there was no comprehensive source of unbiased information about what law firms were charging in the cost recovery arena. Also, there was no reliable information on what a “reasonable” billable percentage a firm should expect for certain items charged to their clients. Because of a lack of available data, law firm operations and executive directors had been making their own decisions about cost recovery, without knowing what other firms were charging. In early 2000, Mattern began collecting data from individual engagements and, starting in 2004, formalized the survey process. The information collected in the survey is added to the benchmark database that Mattern maintains for their clients’ cost-recovery projects.
