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  • Technorati Profile Creative Commons License This blog is licensed under a Creative Commons Attribution 3.0 United States License.

    « Attributes inherent in the common use of the term “productivity” | Main | Discounts from standard rates favor large, expensive firms »

    Billing rate discounts that trigger with volume increases, even retroactively

    Many law departments review law firm proposals to grant increasing, step-wise reductions in rates. Give us more work and we will agree deeper cuts. For example, if the actual hours of work by the firm during a year multiplied by the firm’s rates amounts to $3 million plus, the firm’s discount will deepen one percent per million for any services above $2 million.

    More dramatically, firms propose retroactive rate reductions. For example, assume the same $2 million projected level of services by the law firm. If the actual work done exceeds that amount by $1 million or more, a higher discount will take effect for ALL work done during the 12 month period – that is, the increased discount will apply retroactively to the preceding work.

    The retroactive feature strongly encourages a law department to funnel more work to that firm so that the department can reap the savings on earlier work.

    Posted on August 8, 2006 at 10:44 PM in Outside Counsel | Permalink

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    » Seven Great Posts You Shouldn't Miss. from What About Clients?
    1. The Myth That Companies Hire Attorneys, Not Law Firms by Tom Collins. 2. How The Long Tail Applies To Law Firms by Larry Bodine. 3. Billing Rate Discounts That Trigger With Volume Increases, Even Retroactively by Rees Morrison. 4.... [Read More]

    Tracked on Aug 14, 2006 8:10:23 AM

    » Seven Great Posts You Shouldn't Miss. from What About Clients?
    1. The Myth That Companies Hire Attorneys, Not Law Firms by Tom Collins. 2. How The Long Tail Applies To Law Firms by Larry Bodine. 3. Billing Rate Discounts That Trigger With Volume Increases, Even Retroactively by Rees Morrison. 4.... [Read More]

    Tracked on Aug 14, 2006 8:55:07 PM

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