In-House Counsel

Want Our Business? Don’t Forget Your Discount

While discounts may not make or break every engagement, you can be sure they will help start each new engagement on the right foot.

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Recently I got a call from our CFO’s office informing me they were declining to authorize our contract for outside counsel.

I was a bit stunned.

Sure the CFO’s office routinely gives my legal colleagues and I a hard time about our outside counsel spend, but to flat out decline to authorize a contact, this was a new one.

I immediately set out in search of our CFO both out of a bit of anger she had the gall to hold up one of my contracts, and a bit out of the angst over what might happen if she really doubled down and refused to approve it. After all, the outside counsel was already accruing some billable hours as they agreed to jump in on a time-sensitive matter before their contract had made the official rounds.

Failure to approve this contract in particular would not only cause me to have to eat crow, but it could hamper my ability to engage with future outside firms if word spread our hospital does honor its verbal agreements.

Almost as soon as I burst into our CFO’s office, she immediately disarmed me by stating that she had no problem with the contract, but she had held on approving the contract as the billable hourly rates listed did not reflect a discount.

After letting out a sigh of relief my outside counsel would indeed be paid for their work, I kicked myself for not having caught the omission earlier and was a bit miffed at the outside counsel, whom I had used on several occasions before, for not automatically including a discount in the first place.

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It’s well known in the in-house counsel world that Biglaw hourly rates are not based on science and are open to negotiation. This is not meant to be a political statement on the merit of such rates, but rather a statement that it is known such rates are not set in stone.

In fact, it has become such common knowledge, our CFO — who holds a CPA, not a JD — even knows to look for discounts in all outside counsel contracts.

Especially on large engagements for sizable firms, the discount is usually a drop in the bucket compared to your total take. Likewise for us in-house: we know to expect a big invoice at the end of your engagement, so any discount generally does not do much to move the needle toward meaningful savings.

But it is a matter of principle.

Whether it is a new client or a long-standing one; a big company or a small one; a church or a corporation, any discount offered is noticed and appreciated.

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Above all, it is a sign of partnership. A recognition we have asked for your help in a, likely, difficult time and you stand ready to assist. While discounts may not make or break every engagement, you can be sure they will help start each new engagement on the right foot.

Stephen R. Williams is in-house counsel with a multi-facility hospital network in the Midwest. His column focuses on a little talked about area of the in-house life, management. You can reach Stephen at [email protected].

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