A recent Corporate Counsel story, “Law Firms Are ‘Terrible’ at Billing, Says GE’s GC,” reports on one general counsel’s honest take on law firm billing practices.  The story reads:

Billing conversations are critical to a positive relationship between law firms and clients.  And yet many firms are struggling to get billing right, says Alex Dimitrief, General Electric's general counsel.

"Law firms, in all honesty, are terrible at this," says Dimitrief, who was named GE's GC in November 2015 and who will be relocating to Boston when it moves corporate headquarters.  "A law firm should describe what they did and why they are charging what they did.  Instead, what you get is an administrative task that law firms delegate to administrative employees who haven't been involved in the matter," says Dimitrief.

To illustrate, Dimitrief talks about the considerable bill he received from a firm years ago, which he says he had no issue paying because the firm had earned it.  The problem, he says, came several months later when an additional bill for under $70 showed up with no explanation as to why it was submitted late.  "You start to wonder, 'How do I know that anything I got before was reviewed carefully,'" he says.  "It wasn't worth less than $70 to have this stick in my mind years later as what not to do with billing."

GE works with about 200 firms around the world.  To make the list, Dimitrief's advice to firms is pretty simple: be upfront about what you're billing and be accurate.  "Firms need to invest the time necessary to do this with quality, transparency and timeliness," he says.  "In a world where there are so many lawyers competing for business, when a law firm isn't as transparent as it should be and isn't as timely as it should be, there are a lot of other firms to choose from."

Besides being honest and transparent, law firms can impress Dimitrief by embracing alternative fee arrangements.  Like many GCs, Dimitrief, who wrote a chapter about billing for "Successful Partnering Between Inside and Outside Counsel," says he believes the billable hour is outdated.  "The legal profession is the only profession where two firms can deliver the same results and one firm can charge twice as much as the other simply because they spent twice as much time," he says.  "Getting away from the hourly rate in a way that makes sense for the law firm and clients is the next big challenge for our profession."