Most disfavored by law firms, yet most-favored nation agreements are sought by law departments

For once I side with law firms: most-favored-nation agreements (MFNs) are unfair, ineffective, meaningless, and unenforceable.

Otherwise, they make sense.

My entreaty on most-favored nation agreements seeks multilateral disarmament. Do away with them! General counsel should not ask for and law firms should not agree to fictitious arrangements whereby firms promise to bestow their “best rates” on the general counsel’s matters (See my post of Oct. 30, 2005: MFNs as quixotic quicksand; Nov. 21, 2005: MFNs – from problematic to impossible; Jan. 25, 2006: difficulties with MFNs; Nov. 13, 2006: MFNs only apply to hourly rates; July 19, 2007: administrative obstacles when partners seek to grant rate dispensations include MFN commitments; Oct. 31, 2007: one of ten bad practices for cost control; Jan. 20, 2008: PDF of my article on most-favored nation agreements; and March 20, 2008: if legal groups shared data, they could better enforce MFNs.).

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