Michelle Barron highlights the top eight costs mistakes law firms make, with suggested remedies
The legal sector is unique in the complexity and contentious nature of the calculation and recovery of costs. It is routine for considerable time, effort and frequently litigation to be required to recover costs.
As an experienced costs lawyer, I see common and recurring mistakes, many of which can hamper costs recovery and lead to significant write-offs and adverse costs orders. The impact on cash flow, profitability and resilience in a difficult sector can be immense. But many mistakes are not technical in nature, and can be avoided with minimal time and effort.
1. Delay
Healthy cash flow is the lifeblood of any successful business. The process of costs recovery must be started at the earliest opportunity.
Costs lawyers regularly receive files where there is an entitlement to costs but no action has been taken to recover them. In some cases, several years may have elapsed since the entitlement arose. The reasons for delay vary, but a systematic failure to manage lock-up is usually central.
Rigorously followed credit control procedures are the
