Some law departments might like an arrangement where it and a primary law firm commit to a significant relationship that motivates the department to use the firm frequently. To illustrate, the law firm could create a bank of 5,000 hours of time during an 18-month period for a flat fee, payable semi-annually. Maybe the fee is $1.5 million; maybe it covers all real estate services in Europe; maybe it any local counsel fees; maybe reimbursable expenses are billed separately; maybe every aspect is negotiable – except the cost and hours.
While less precise than a fixed-fee arrangement according to which a firm agrees to handle all of a certain kind of services over a period of time (See my post of Dec. 7, 2005 about collars.), this kind of arrangement benefits both the department and the firm. The former achieves some cost reductions; the latter can afford to invest in systems, knowledge of the client and training.