The difference between a rebate and a discount surfaced in a previous post (See my post of April 23, 2006 on the economic point of the distinction.). What I didn’t write about then was the sheer administrative hassle of rebates. Here is a comment to that point from a British bank’s law department: “Barclays gave up asking for rebates, say at above a million pounds. It was too hard to calculate when the rebates kicked; how to get money back to the client; how to give rebates back to a bank customer. One firm was unwilling to give up rebates, because they had higher rates than the other firms and would reach the rebate points more quickly!”
The quote comes from Morrison, Rees W. (ed.), Lessons from Leaders (Law Department Administrators) (Hildebrandt Inst. 2005) at 99, and were the comments of Barclay’s quondam legal administrator, Bjarnie Anderson. Rebates from law firms create administrative nightmares.