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During the month of April, 1997, the Legal Research Network through its LERN on-line information service, conducted a survey of the business and marketing practices of individuals engaged in expert witness or litigation support activities. This survey was conducted by e-mail. The survey was made available to expert witness subscribers to the Internet mailing list conference "Expert-List" hosted by the LERN service, subscribers of the LERN service, and visitors to the LERN Web page. The survey was placed on the LERN Web page at https://www.witness.net and an announcement posted to the members of the Expert-List mailing list conference as to the availability and method by which the survey could be retrieved.
A total of 214 surveys were downloaded and 59 surveys were completed and returned to LERN via e-mail, fax, or surface mail.
The following is a compilation of the results of that survey. We have tried to strike a balance between the presentation of raw statistical data, and our interpretation of the significance of the data. For the purposes of future surveys, any feedback users may give regarding alternative interpretations and analysis would be appreciated.
The survey consisted of three parts. Part I covered billing practices for expert witnesses. Part II covered marketing practices. This was an attempt to determine the most effective marketing methods, an area which we believe to be of particular interest to the expert witness community. Part III consisted of general survey questions to learn more about the background of the typical expert witness.
It has been our experience that most experts bill on an hourly basis at some fixed rate. However, we have occasionally heard of other billing methods including experts who bill for fractions of a day or certain minimums, on a fixed price basis, or have other innovative billing practices. The survey supports our earlier conclusion, in that of the 57 surveys responding to this question, 53 bill at an hourly rate, with one individual indicating billing in increments of a day and three indicating billing on a fixed price basis. The actual billing rate employed by most consultants averaged $157.00, compared to last year's $154.00 and $164.00 for two years ago. We see no trend for rates over the last three years. This number represents the average of all the billing rates submitted by the survey respondents and includes a recalculation to an hourly rate for those who indicated a billing of something different than an hourly rate. The median billing rate was $172.00 per hour (one half the billing rates were higher, one half the billing rates were lower). The highest billing rate reported was $350.00 per hour and the lowest was $60.00 per hour.
Thirty-nine out of 57 do not plan to increase their rates in the coming year, while 18 do, a ratio close to past years, again with no trend.
The majority of consultants do not bill a different rate for travel out of the office. Of those who answered this question, 35 reported no difference in their rate for travel time and 22 reported "yes". For those who reported a different rate for travel time, four indicated no charge for travel time and one indicated the rate is negotiated on a case-by-case basis. We can only assume that those individuals not charging for travel time either conduct little travel out of the office or all their travel is relatively close to the office. Most consultants who do charge a different rate for travel discount their rates to some extent, the lowest being 33% of their standard hourly rate, but almost all at 50% of their standard hourly rate.
We also inquired as to whether or not experts charge a different fee for deposition and court appearances. Of the 58 respondents, 35 charge the same rate for depositions as they do for their standard practice, and 38 charge the same rate for court appearances as for their standard practice. Twenty-three individuals reported a different rate for depositions and 20 a different rate for court appearances. Review of the responses indicates that those who charge a different rate for depositions are the same ones charging a different rate for court appearances.
With a couple of exceptions, the markup for appearing at depositions or court appearance over the standard billing rate was exactly either $50 or $100 above the standard consulting rate, which when expressed in percentages, ranged from 33% to 100%. The average deposition or court appearance fee was $240.00 when considering only those that charge a higher fee for these services. If all respondents are considered, the average deposition or court appearance fee was $184.00.
Some experts charge for being available on call to appear at court or depositions. The survey indicates that this is not the general practice of consultants. Of the 57 respondents to this question, 42 do not charge an additional fee or any type of fee to be "on call" while 15 do. The survey did not determine whether or not there is a different rate for being on call versus the standard billing rate. Presumably, the philosophy for charging to be available is that the consultant must cancel other activities to be available. This would seem to be particularly true of those in the medical profession who have office hours and patients which must be scheduled in advanced and cannot be quickly rescheduled should the court appearance be postponed. However, our review of the relationship between the area of specialization of the expert and their answering yes or no to this question showed no correlation with the medical profession.
Retainers have always been an issue both with attorneys and experts and the survey asked whether experts request retainers. Of the 59 respondents to this question, 14 (24%) never ask for retainers, 26 (44%) always ask for retainers, and 19 (32%) sometimes ask for retainers. Therefore, 76% of experts ask for retainers always or sometimes. Twenty-one asked for retainers in the $1000 to $3000 range, 15 were less than $1000, and only one was greater than $3000, and the balance did not report the size of the retainers that they request. The average retainer was just over $1200.
In the course of their practice, most experts incur additional expenses in support of their activities, including such items as telephone charges, cost of photocopying, fax charges, administrative assistants and typing, mileage related expenses as part of travel, photography and lab services. We found that the majority of consultants pass through such costs without markup. Of the 51 respondents to this question, 44 bill their clients at cost. Seven bill at cost plus a percentage markup.
A total of 31 out of 51 indicated they charge for photocopies.
Sixteen out of 51 indicate that they charge for faxes.
Nine out of 51 indicate charging for telephone time.
Nine charge for administrative functions.
Thirty-four of the 51 reported charging for travel mileage at rates ranging from 25 cents to 50 cents per mile, with the average rate for mileage being 34 cents (up 1 cent from 1996) and almost all in the 25 to 35 cent range.
A total of 30 charge for photography, and 34 for laboratory services.
Account collection has been reported to be a chronic problem when dealing with the legal profession. The next questions were designed to determine just how prevalent a problem are overdue or unpaid accounts.
The survey asked what percentage of accounts become uncollectible in a given year. The number reported ranged widely, from 0% to 50%, but with an overall average of 3%.
Information pertaining to what percentage of accounts become "problems" was also solicited. A criteria of considering any account over 90 days old to be a problem was chosen. Here the number was considerably higher, at 11% on average, with the numbers ranging from 0 to as high as 50%. These numbers are about the same as 1996.
The survey tried to determine the extent to which experts perform their services on a "pro bono" basis. "Pro bono" was intended to mean services performed for free for clients unable to afford expert services or in cases where the actions of the opposing sides were so nefarious, that the expert offered his or her services "on principal". Thirty-nine out of 56 do some pro bono work.
The survey requested information pertaining to how much time experts are billing in expert witness activities in a given year. Our experts spend widely varying amounts of time at expert witness work, since a majority have other jobs (teaching, practicing their profession, retirement). The survey asked how many billable hours the expert has in a year, what percentage of their time is spent on expert witness activities, and what is their gross income (before expenses) from expert witness activities.
It is easy to calculate how much an expert could earn in a year. If it is assumed an average year has 2080 billable hours (52 weeks, X 40 hours per week), and the expert bills at $167 per hour (the survey average), the earnings would be $347,360 per year. Even if you assume a less than 100% utilization rate (due to illness, vacation, and time spent on non-productive but necessary activities) of 75%, the earnings are still $260,520.
So, if the number of billable hours reported in a year are multiplied by the average billing rate, a result close to the average reported earnings should be computed. Conversely, if the percentage of time spent on expert witness activities is multiplied times 2080 and then times the average billing rate, the result should be close to the average earnings. Not so.
The average consultant reported 419 billable hours per year (down 20% from last year), and an average expert witness income of $68773. Taking the 419 hours times $167 per hour average billing rate, yields $69,973, which is close, given the uncertainties and variables in this analysis. However, the average consultant reports spending 45% of his or her time on expert witness activities, which should translate into about 998 hours per year. It would appear experts are either over-reporting their time, or under-reporting their income.
The highest reported earning was $350,000, with 5 out of 34 earning greater than $200,000 per year, and 10 out of 34 earning $100,000 or more per year.
Based on the level of discussion on the expert list, many experts are particularly interested in the best methods for marketing their services. The questions in this section were designed to find out how many experts actively market their services, and to evaluate which methods are most effective.
Many experts do not market their services at all, having obtained a steady volume of work either by prior marketing efforts, or word-of-mouth advertising. In addition, there is a body of experts that do not market their services due to the negative connotations such marketing can create if brought before a jury (being an expert has got to be one of the few businesses in which marketing is actually a disadvantage!). Still, you have to get business somehow.
In response to the yes/no question of "Do you actively market your services to the legal profession?", 35 responded "Yes", and 22 "No". This is a substantial increase in "yes" responses over previous years.
Listed in the survey were a variety of common marketing methods. For each method, we tabulated the total number of times someone checked a particular marketing method (survey participants were instructed to mark all the methods they employ). The number of votes for each method were compared to determine which was most popular.
The survey also asked each survey participant to indicate which methods were MOST and LEAST effective (and they could vote for more than one of each). Starting with a score of 0, for each marketing method a value of 1 was added each time a method was voted MOST effective, and 1 subtracted each time a method was voted LEAST effective. The net score indicates the effectiveness of each method. A plus score indicates a more effective method, and a minus score a less effective method. The greater the plus score, or the smaller the minus score, the more/less effective a given method was determined to be. A score of 0 could indicate either a marketing method that was neutral in its effectiveness, or was a method no one used.
The following table summarizes the results:
|Marketing Method||Total Score||Net ScorePrint Media||9||-1Display Ads||9||0Business Card Ads||17||0Classified Ads||10||0Yellow Pages||5||0Legal Trade Shows||7||0Cold Calls||5||-4Seminars & Workshops||12||0Online Activities||24||-4Online Forums||6||0Web Pages||20||0Planning a Web Page||10||N/AMailList||13||0Online Directories||25||-4Newsletters to Law Firms||7||+3Expert Listings in Books||23||+1Publish Articles in Legal Publ.||7||+1Direct Mail to Law Offices||12||-1Networking||18||+7Referral Services||19||+1Referrals by Clients||14||+9|