Managing costs: work-down retainers, workload, stop-work, liabilities
Expert witness fees can be very expensive, sometimes more than the attorneys handling the case. They are various ways to budget an expert’s costs. The easiest is to engage the expert with a “work-down” retainer. This is retention method is analogous to a product sale using Cash-On-Delivery. terms. A retainer is paid to the Expert or Expert Referral Service in advance; an amount equal to n-hours of work exclusive of expenses. If, for example, the retainer was $5,000.00 and the Expert’s hourly rate was $300.00, 16.7 hours of the Experts’ time has been paid for in advance. The expert will stop work until the retainer is replenished; thus providing a budgetary control of cost. The problem with arrangement is the work is interrupted during the retainer replenishment period. This can be minimized by paying a larger retainer and pre-purchasing more hours in advance.
Keep in mind that the expert will be task-oriented with a strong desire to research all the available facts, study the data in depth so an informed opinion can be made. The time involved to complete the job from the expert’s perspective may not be in synchronization with the financial budgets of the end-client. Expert witnesses are a significantly important aspect to any client’s case. They earn incremental income by performing expert witness services and they expect to be paid in a timely fashion, or they will stop work (usually at the most inopportune time) until they are paid in full for all outstanding invoices. Keeping the Expert happy with prompt payment is a smart way to manage litigation.
When an Expert is told to stop work, either because the case has gone into settlement talks or the court has order mediation, they will do just that; stop mid-stream. It is the custom of Experts not to return materials unless specifically asked to do so. They will invoice for their time and expenses to date and typically not restart until outstanding invoices and expenses are paid. Stop work orders should be communicated to Experts in writing with return receipt of the order required.
If you’re the new law firm in an ongoing matter, you also inherited the expert witnesses retained by the original firm and approved by your new client. Re-interviewing these experts is good practice. If there is a personality or other compatibility problem between your firm and the original experts it can only present problems going forward. It is expensive to bring a new expert up to speed, but no more so than engaging a new law firm. The end-client making the decision to change law firms should be advised of that fact.
Expert witnesses are individuals, not companies, albeit in economic damages assessment companies that specialize in the area of damages can involve the engagement of a company and teams of people, however, there is usually only one testifying expert. Each expert will have a different philosophy and attitude with respect to prompt payment. Some experts invoice every two weeks to keep cash flow coming, most invoice monthly but get very nervous is payment isn’t received within 30 days. A large percentage of experts will simply stop work if payments are delinquent. Accordingly, the end-client’s financial problems are the attorney’s not the expert’s. Sometimes the only way to keep the expert working through difficult financial times with the end-client is for the law firm to take responsibility for the expert’s fees and expenses. While this sounds like a prudent idea, especially if the case is well downstream and nearing trial, in practice it rarely happens. There are experts who have great patience with regard to payment; but frankly they are rare. Like the end-client and the attorneys who represent them, they want a check on payday, not six-months later.