Corp. Counsel, Vol. 16, March 2009 at 17, recounts that Jeff Carr, the General Counsel of FMC Technologies “sent a letter to FMC’s law firms in which he asked them to cut their bills by 10 percent on matters less than half done, and by 5 percent on matters more than half done.”
If you are a firm, how precisely can you tell where you are in a matter? And, given the financial incentive, won’t lots of matters be “over half done?”
Perhaps once a matter has passed the half-way point, that is like a point of no return; the law department does not want to change firms so it lacks the leverage to demand a 10 percent slice (See my post of Sept. 12, 2008: transfers of matters to new counsel with 8 references.).
The two discount points will create quite a logistical mess in terms of tracking compliance.
Whatever the logic behind this move, it suggests a new way to think about discounts (See my post of Jan. 21, 2008: 10 more posts with variations on discounts; and Dec. 26, 2008: third metapost on discounts, with 12 references.).