Protection for law firms in a fixed fee: ceiling on fixes and switch over to hourly when hit

An article describes a fixed-fee basis arrangement between Brunswick Corp. and K&L Gates. ‘Following the first year of representation, the fixed-fee contract had to be modified in order to provide more protection for the law firm.” Brunswick and K&L Gates agreed to set “a ceiling on fixed fees” and to switch a case to hourly billing if that ceiling is met.

I read into this brief reference several points to note. A ceiling on fees and the switchover operates somewhat like a collar (See my post of Dec. 7, 2005: collars to prevent injustice.).

Note that the two parties let a year go by so that they could spot the kinks and figure out improvements.

Note also that these fixed fees involved litigation, the most notorious work to handle on a set cost. The reference suggests that each case stood on its own; it did not state whether there was a portfolio approach.

Finally, note that reasonableness needs to prevail even when both sides hammered out the terms. If either side felt they cut a really raw deal, they will toss in the hand.

The full article is in Met. Corp. Counsel, May 2011 at 30 and it cites a Chicago Tribune post in January 2010 under lawblogs,