Posted Nov 15, 2007 02:15 pm CST
Michigan law firm Warner Norcross & Judd, tapped as Whirlpool’s North American business litigation counsel, has agreed to set up a flat-fee billing arrangement with the appliance maker.
Jay Cragwall, the client service manager for the Whirlpool account, told the National Law Journal that the arrangement can benefit both sides. “If we can give them predictability and learn to live with an appropriate set of incentives, they’re happy and we’re happy,” he said.
Flat-free billing is most often used in commercial litigation, employment law or mergers practice, the publication says. But lawyers are still reluctant to adopt it because they are risk-averse.
A recent study by the Association of Corporate Counsel shows that about 95 percent of in-house counsel use standard hourly rates for about 75 percent of their work. The number shows some movement, though—in 2003 they used hourly billing for 81 percent of their work.
Other corporations that have flat-fee arrangments with outside law firms include technology company Cisco Systems Inc. and mailing equipment company Pitney Bowes Inc.
Cisco’s flat-fee firms include Baker Botts for patent counseling; Fenwick & West for some corporate work; and Morgan, Lewis & Bockius for commercial litigation.
Pitney’s flat-fee firms Proskauer Rose for mergers and acquisitions work and Robins, Kaplan, Miller & Ciresi for litigation.
One firm that has embraced flat fees is Bartlit Beck Herman Palenchar & Scott of Chicago. It collects 98 percent of its revenues from alternative billing arrangements.
Bartlit Beck managing partner Sidney “Skip” Herman told the NLJ that few law firms are embracing alternative billing. “There really hasn’t been that sea change,” he said.