Legal Cost Specialists

Costs budgeting data

Some excellent advice from Antony Smith of Legal Project Management Limited, writing in Litigation Funding:

“Generally, estimating is best done when based on historical data of previous projects which are similar to that at hand. Lawyers are lucky here, as their practice management systems and/or case management systems should hold this kind of data. … Ideally, the historical data used should be from cases the lawyers responsible for preparing the current estimates have themselves worked on previously. In the absence of that, lawyers should mine historical data of similar cases worked on by others in their firm. My advice would be to try and avoid any industry benchmarks – the whole point is to estimate the effort and cost it will take you and your firm to complete the matter.”

I fear this is the least understood area of costs budgeting and will be, in the early days, where things most go wrong.

Many of those preparing budgets will not be using historical data but will be using their “experience”.

To mine historical data at firm level, let alone fee earner level, so the data properly fits the phases’ stage of budgeting is generally going to be a fantastically time consuming, and therefore expensive, task for which it will not be possible to charge.

Even where costs firms have undertaken serious analysis of their historical data, this will often only produce industry averages. To apply this data to a new firm of solicitors seeking help with their costs budgeting is a recipe for disaster.

11 thoughts on “Costs budgeting data”

  1. Money Money Money

    Is it just me, or is the gravy train in costs about to get bigger?

    MY bank manager is giddy in anticipation….

  2. the proliferation of WIP management and valuation companies offering to assist in budgets bears testimony to the pitfalls

  3. Charles Wheatcroft

    ‘abcde’

    There is an extra line. The front line is still there but there is an extra line before you get to the second line.

    The time spend in dealing with costs is a constant but the effort is redistributed.

    Points of dispute are shorter but the statements of costs are longer; there are fewer detailed assessments but more time is spent preparing budgets – we just need to adjust our focus and move along…

  4. also @ CW

    I disagree that the time is constant and redistributed. Sorry but I can only see that time is being increased

    in terms of Budgets both sides are racking up fees on these things. Some are quite considerable. An increased cost

    Then claims are being listed for significant CMCs. Previously these would have been dealt with by consent or by a 30 minute hearing. Now we have 2 hour CMCs / half day hearings. Skeletons are going in and counsel are being briefed in some instances. This is a further increased cost

    then we have the obligation to monitor and revise. A further increased cost

    Then at the end the paying party will object to the costs claimed even though its within Budget. This is provided for already by case law. They will say we never got to trial, or you only ever got 5 of the 7 expert reports budgeted or the JSM never took place. A Bill will still be required. This, I agree, is a constant. However the Bill will take longer as it has to be costed in phases and care taken to ensure that it complies with how the case was budgeted and most importantly the Budget imposed

    Sorry I dont see this as keeping costs constant. In my eyes its only serving to push them up through the roof

  5. @abcde – as did Woolf, didn’t we all have a pleasant surprise when they got rid of old Scale 1 and Scale 2, bills escalated, assessment costs escalated, etc,etc ………….

  6. I haven’t noticed anything at all in the rules about bill of costs having to be drawn in stages in line with the budget forms. In fact, wasn’t that one of the major criticisms – it won’t work because bills are not drawn in stages like that.

    At least most bills will be provisionally assessed.

  7. just back from a CMC and CCMC.

    Judge refused to deal as the Def thought there could be scope to agree despite fact that parties are poles apart. Judge jumped on this and effectively said agree or come back again – for a second CCMC (in person with paginated Bundles etc)

    Judge would not entertain fact that they had power to consider the assumptions, consider whether they were reasonable and then set a budget accordingly. It was it is either approved or no approval

    this is now a complete waste of time and costs

  8. another hearing – I despair

    In the High Court – serious injury case. We are allocated a family judge. They routinely state that they are there to reduce the Claimant’s costs despite being told what the purpose of such hearings are

    In terms of medical records …. do the solicitors even have to consider the records??

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