Blended rates do not necessarily reduce legal fees

How can you know that blended rates are saving you money? Working with an aerospace law department, I heard a lawyer say, with no explanation, “We are saving money because X firm is giving us a blended rate.” There is no way to prove savings unless you had previously calculated the firm’s blended rate from a set of representative bills and could show that the rate you negotiated shaves that figure. (See my posts of Aug. 21 on difference between firms’ blended rates and Sept. 4, 2005 on GE and its blended billing rates from auctions.)

Without doing such a calculation, all you can hope is that the blended rate is causing the firm to delegate work down – but not too far. This is all to say, to what benefit is a blended billing rate offered by a firm?

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