"The bill is about double what I thought we'd see!" exclaimed the CEO. "Now I have to work with a board of directors that is not going to be happy (I told them all was well and legal costs were going to come close to my estimate for this project). And I have a great attorney at a first class law firm that has to eat a lot of the billing. It's going to be embarrasing for both of us. What should I do about that?" As I listened to the lament, I reflected that I had heard this all too often in the past. It always comes out the same: the legal bills end up much higher than what seems "reasonable" and yet the work done is vital to keeping a startup out of trouble. A great lawyer is worth his or her weight in gold. But sometimes there is a lot more weight than we can bear.
My response to the CEO was simple: "This is normal and both you and your lawyer are going to have to accept some significant pain in this case." The early estimates of the project (an acquisition) were far below the actual hours spent. Furthermore, along the way, the CEO did not put pressure on the senior partner to work harder to get the average billing hour down (by using more junior lawyers wherever reasonable). These projects can be managed. It is up to CEOs to learn how to keep the billing from breaking the bank.
BOTTOM LINE: Proactively manage large legal projects. Don't let them manage you. Cost control for legal bills can be accomplished. Put in the time and effort. It is worth it.