Just clip this coupon to save big dollars. Has the corporate legal market come to offering clients coupons?
Not quite but read on. That Eversheds mulls shares for fees as firms step up alternative billing (Legal Week, 18 March 2010) is not such big news. As the article notes, we saw quite a bit of this in the dot-com era.
I was quite surprised, however, to read
“Slaughter and May has entered into rebate arrangements with clients, paying back a percentage of fees at the end of the year depending on how much has been spent. The arrangement has been in place with one client for several years and it expects to use it more frequently.” (emphasis added)
Rebates are common for consumer goods and some B2B transactions. But Slaughter and May? I think it speaks volumes about the legal market that a firm with a unique, high end position (think Wachtell Lipton in the US) is offering rebates.
“Other firms predicting an increase in rebates include Lovells, CMS Cameron McKenna, Norton Rose and Allen & Overy (A&O).” Hmmm. While rebates may shock, they are, after all, simply volume discounts after the fact. Volume discounts are common but it’s not clear whether firms have any recourse if the volume does not materialize. Rebates take care of the volume uncertainty (though it’s not clear how it affects the client’s cash flow).
I wonder if the energy spent on working out details of rebates would not be better focused on alternative fee arrangements. And if we have rebates, how far away can coupons be? Check your Sunday circular.