An article in Law Practice, Nov./Dec. 2010 at 34, mentions several variations on the billable hour, including “daily, weekly and annual rates for individuals and teams.’ My vote against daily rates has already been cast, with later equivocation (See my post of June 5, 2007: daily rates for outside lawyers are not an effective technique; Nov. 24, 2007: sometimes appropriate to ask law firms to bill on a daily or half-daily rate; and May 23, 2007: daily rates for international arbitrators.). Even so, a bit of pondering produced several thoughts about daily rates.
They sound like “take-or-pay” arrangements, meaning the law department either takes (uses) the time of the person or team or pays for it anyway. But does that mean that the lawyers cannot work on other clients’ matters if they are paid exclusively by one?
Like mortgage rates, especially adjustable mortgage rates, the charge for the day, week, or month should decline because of volume, perhaps even by a formula. For an hour, Rees is $500; for a day he’s $3,800; and for a week, a bargain at $18,000. Are daily rates simply computed as discounts from standard hourly rates?
How many hours does a “day” include? Some consultants work onsite far more than eight hours during a day. Is it really just a euphemism for a discount on eight hours?
What if it turns out to be one day a week for five weeks? Can the law department retroactively invoke the lower weekly rate?
Why not a monthly rate? “We want this lawyer for a month of depositions.” A problem with a month is that you cannot assure yourself that you will productively occupy the time of the lawyer.