With gas prices averaging $4.00 per gallon, many firms are faced with the reluctance of their lawyers and staff to use their own cars for firm and client business.Several law firms have observed that their lawyers’ usage of car services and auto rentals has increased dramatically.As one CFO told us, “We typically see travel reimbursement reports with charges of $30 or $40 for driving to the airport plus the charge for parking.Now almost everyone is taking car services that cost $80 to $100 each way.”But, apparently the biggest change is lawyers renting cars to drive to suburban client locations rather than drive their own cars.
But a lot of concern may be abated. Last week, in a rare mid-year adjustment, the IRS announced a 16 percent increase in the mileage reimbursement standard for businesses.The new rate, effective June 23, 2008 is 58.5 cents per mile.Average pump prices were at $3.07 at the end of 2007 and, as of last week, were $4.01.The IRS mileage reimbursement standard is the amount that taxpayers may deduct for business or charitable use of an automobile but is widely adopted by businesses as the standard for which employees are reimbursed for using their personal car for business. It is also the rate that many law firms use to charge clients for use of a lawyers personal car.
For firms where there is still dissatisfaction over reimbursements, a consulting firm, Corporate Reimbursement Services (www.crsinc.com), will prepare a customized reimbursement calculation designed to take into account the specific circumstances of a drivers’ locations, automobile, driving habits, maintenance levels and similar factors.
