September 13, 2005
Blended Rate as an Alternative Fee Arrangement for Law Firms
There is a song that includes the line, “Short People Got No Reason." I always remember those lines because I am slightly height challenged at 5’ 8”. I used to be taller but standing in booths at legal conferences robbed me of a good inch and a half. My driver’s license still reads 5’ 9½”. What has the above got to do with anything? As far as I am concerned, “Blended Rate Agreements Got No Reason!”
My research on Google™ did not disclose a single defense of the Blended Rate approach that made any sense for either the client or law firm. The only possible idea I can come up with is that the resulting rate saves the client from questioning why a partner was doing work that could have been performed by an associate or paralegal. I suppose on the other side that it means that the law firm could theoretically make more on the engagement by using less qualified people. If the client is smart, and most are, they start dictating who in the law firm is authorized to work on their matters. Thus, they push the talent level up and realization down.
Whatever the logic, it is bound to lead to a result that is neither in the interest of the client nor the law firm. If you can defend the Blended Rate Arrangement, please post your supporting comment.
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“Generally [the Blended Rate Arrangement] is unrelated to value to the client, which may penalize either the lawyer or the client."
Amen—and may the Blended Rate Arrangement R.I.P.
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Filed under Alternative Billing by Tom Collins