Actually, that's not entirely true. If lawyers bill inappropriate charges, you don't have to pay those charges. Inappropriate charges include excessive hours, administrative tasks, overhead, or other charges you disallow based on your agreement (commonly called Billing Guidelines). Based on data I've worked with (insurance companies, financial services company, real estate firms) those inappropriate charges are anywhere from 5-15% of the total. Usually 5-10%.
The advantage of having the VC pay the legal bills is that they are a bigger fish and can more easily put in place and enforce the legal billing guidelines. Also, as a much more likely repeat customer, the VC will likely get better bills to begin with.
The advantage of having the VC pay the legal bills is that they are a bigger fish and can more easily put in place and enforce the legal billing guidelines. Also, as a much more likely repeat customer, the VC will likely get better bills to begin with.