Holland & Knight – Ultimate Client relationship Nightmare

In 1 on January 3, 2009 at 7:06 pm

The Ultimate Client Relationship Nightmare


Chicago-sun-times-masthead-175On August 30, 2006, the Wall Street Journal reported (pg. B1) that Holland & Knight was involved in a billing dispute with a client.  The article was reprinted in the September 4, 2006 issue of the Chicago Sun-Times: it is the firm's Chicago office that is embroiled in the dispute.  The details of the dispute are not of great moment, and in the interest of full disclosure, two of my partners (former Holland & Knight partners) are quoted in the article.  But while the details of this situation are not of moment, the article does beg the question of how a firm should handle a major billing issue with its client.

Let's assume one of the facts in the Holland & Knight story–a young partner claims that the billing partner, not involved in a piece of litigation–has dramatically overbilled the client for that matter.  From that, let's go to a place the Holland & Knight story does not go–that the young partner is threatening to make his complaint known to the client.  What should the firm do?

I have written previously about how to handle mistakes.   But that post involved errors in judgment, while this example involves an allegation of fraud.  Even if not true, the allegation itself can threaten the client relationship, with even the most loyal client wondering why the young partner made the allegations, and why.  It seems to me that simply denying the allegation is an incomplete response, potentially fatally so since it does not address the underlying questions that most certainly exist.

At the same time, simply offering to make an adjustment to the bill almost seems to validate the charge by the young partner, so that approach is not the preferred one either.  While potentially expensive, the response I propose is based on the notion that our integrity and credibility are traits that can never have an associated price tag.  With that as the premise, someone from the firm must be in the client's office as swiftly as humanly possible.  The issue must be identified candidly and the obvious distress to the firm and the client must be recognized.  The client must be assured that its confidence in the law firm and its lawyers is the firm's paramount objective, and to that end, the firm is prepared to refund the entirety of the fee paid by the client if, after investigation, there is any doubt on either side about the integrity of the bills and the billing process.  The firm should then volunteer to submit the entirety of its bill to examination by a neutral party agreeable to the client, with the firm to bear the entire expense.

There may perhaps be other ideas on how to retain the client's trust without putting the entirety of the fee at risk.  Perhaps the client herself will be the source of ideas, and most certainly the query should be made.

There remains the obvious personnel issue.  While retaining the whistleblower may be distasteful, terminating him sends a powerful and negative message.  To the extent there is merit to the claimed breach of trust, the person responsible to the lapse may need to leave, but at a minimum cannot be left in a position where the firm's integrity can again be compromised. 

To the extent the matter has become public, as in the Holland & Knight story, it seems to me that the matter must be addressed publicly and that the firm's clients need to be individually reassured that such behavior is an aberration and is not tolerated at the firm.  Toward this end, actions will always speak louder than words.

Posted By Patrick J. Lamb on September 4, 2006 In Client Service , Leadership and Management

Posted via email from HKLaw Investigation


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