Do You Have Your Case Budget Yet?

Clients, can we speak frankly?  Do you have your budget for your most recent piece of legal work yet?  Did you ask for one?  Now is the time to insist on a detailed litigation budget.

The case budget is an essential tool for litigation management.  It forces your lawyer and you to carefully examine what is in dispute, what is required to prove or disprove the allegations and the costs associated with this process.  The best example I’ve heard to analogize to the need for a budget is to compare a house rehab project with a budget and plan and one without.  Under each situation, the rehab job will eventually get done.   But with the budget and plan in hand at the outset, all parties know what it will cost to a reasonable degree of certainty, the right parts are installed at the right time and the outcome usually matches the plan.  The rehab project that is done on an “as you go” basis usually finds that steps were missed, costs are surprisingly high and some essential component is missing or incorrectly installed.

Requiring a budget from a lawyer is not asking for rocket science.  The lawyer will resist the effort, will delay or ignore the request and fill the budget with assumptions and disclaimers.  But think of it this way, if a doctor can create an annual budget for his research to cure cancer, or a scientist can prepare a budget for the cost to launch the shuttle on its next trip, then a lawyer should be able to calculate the costs to bring the litigated matter to a conclusion.  A lawyer familiar enough with the litigation process, and the billing process should be able to estimate the costs in a matter.

Plus, no one says a budget is set in stone.  Of course, a case changes course due to other parties, court rulings, the court calendar, and the behavior of one’s opponent.  But these events occur in all cases and should be taken into account in a budget.

Creating the budget should not be the end of the process though.  It is essential on at least a quarterly basis to compare the actual bills to the budget to determine if the case is following its predetermined course or is off-track.  This short review should tell the client if the case is progressing as anticipated and at the cost projected.

Clients, you have a right to know what the litigation is going to cost.  Lawyers have the knowledge and ability to complete this task.  You should insist on a detailed budget that itemizes the activities expected to be undertaken, the attorneys (by name and rate) who are expected to perform the activities, and allow for a category on the budget that covers case reporting and correspondence.  Whether you use a form your company designed or use the ABA Billing Codes, or allow the lawyer to explain the activities and cost in his own form, it behooves the client to insist on a budget before proceeding with any activity.

 

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