Chapter 8 Flashcards
Engagement Letter
A letter summarizing the scope of representation and the fee agreement between a lawyer and a client.
Block Billing
Charging a client for services rendered in one large block of time rather than itemizing the tasks performed
Preliminary Bill
a bill prepared for an attorney’s review and consideration for adjustment before a final bill is prepaired
Fee Adjustment Memorandum
A form used by an attorney to increase or decrease a client’s bill as appropriate.
Fee Allocation
When a percentage of the bill is given to the originating or supervising attorney as compensation
Cost Recovery System
A utility program that allows data to be transferred to a billing program by copier or telephone system for recover of costs.
Arbitration
The resolution of a dispute without court involvement.
Fiduciary
Of, relating to, or involving great confidence and trust; a person who transacts business for another person, necessitating great confidence and trust y the second party and a high degree of faith by the first.
Team Churning
Making frequent changes in the legal team
Direct Profitability Factors
Factors that affect a firm’s profitability in a short period of time, usually one per year.
Compensation Expenses
Employee expenses, including wages, benefits and taxes
Operating Expenses
Expenses other than compensation expenses that include occupancy costs, office operating costs, costs of professional activities, and general business expenses
Indirect Profitability Factors
Factors that indirectly affect a firm’s profitability over a longer period, more than one year
Realization
The process of turning time into cash
Write-Up
An increase in the amount owed because of a premium
Write-Down
A decrease in the amount owed because of a discount
Write-Off
A credit for the total amount owed
Gross Income
Income received before payment of expenses
Downsize
To reduce staff and expenses because of reduced income
Per Unit Cost
The amount of money it cost to produce a product or provide a service
Realization Rate
The percentage of the total amount billed by a timekeeper that is actually received by the law firm as income
