A fixed fee with Hewlett-Packard to handle employment, property, and medium-sized litigation

A British firm, Shoosmiths, has an “umbrella” arrangement with Hewlett-Packard, as reported by the Financial Times report, “Innovative Lawyers 2009,” dated Oct. 23, 2009 at 36. The report discloses neither the amount nor the time period of the deal. The fixed price deal covers all employment, property, and medium-sized litigation. Once the annual fee is agreed, if the firm comes in below the figure, it can keep half the difference; if above, it absorbs half the difference. That is the widest “collar” I have seen (See my post of Dec. 7, 2005: the collar technique.).

The firm has a strong incentive to handle the range of services efficiently because its partners profit by half of every pound they come in below the budget. Just reading that sentence, however, it also means they lose half of every pound less than budget so they would want to hit the budget spot on if there is work to be done.