Cost Recovery Breeds Client Frustration in New Survey

1. Client pushback is increasing. The survey showed that client pushback -- and outright refusal to pay -- is much more intense than in the past. The leading irritants are legal innovation and word processing, followed by telephone calls, and black-and-white photocopies.

Based upon follow-up discussion with respondents, customers seem skeptical about whether fees charged for legal technology and word processing reflect the firm's actual costs. Furthermore, many customers feel these services should be part of a firm's overhead -- aka, the cost of doing business.

Clients as well resist telephone charges, particularly because of the dramatic decrease in costs mainly attributed to the widespread implementation of VoIP (Voice over Internet Protocol) telephony. Nor are customers happy about paying for photocopying -- the most commonly recovered item -- in an era where digital imaging just as PDFs is commonplace.

In reaction, many firms no longer charge for legal innovation, decreasing from 97 percent in 2008 to 73 percent in 2010 -- a 24 percent drop. In the same fashion, the percentage of firms charging for telephone calls has declined 26 percent from 2006 to 2010.

• For telephone charges, chances are if you actually analyze the numbers, it is not cost-effective to continue to recover these costs if you are pricing these services competitively.

The whole capturing copies

• If your firm is on the whole capturing copies and faxes nevertheless not prints, you have already suffered a dramatic decrease in billable revenue. Print volumes currently average in broad outline 350 percent of copy volumes and will only continue to grow at the expense of copy volume. It before long will be difficult to justify the cost of the hardware and software required to capture only copies.