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BigLaw May Roll Out 'Minimum Annual Legal Spend' Requirement for Clients
Legal Week reported Thursday that law firm DLA Piper, which will become the largest in the world following a merger with its Australian partner DLA Phillips Fox, has distributed to partners a 2011-2014 strategic plan that contains an interesting requirement for new clients:
New clients will have to commit to a minimum annual legal spend with the firm, understood to be around €25,000 (£21,000) in the first year of instruction for clients of DLA Piper International where there is no potential conflict and €100,000 (£86,000) for those where there could be a conflict.
The firm’s US arm is thought likely to implement a minimum billing threshold of $200,000 (£126,000) for all new clients.
The minimum spend requirement (or "cover" charge, as Law Shucks describes it) is designed to help reduce the number of situations where the firm is "prevented from taking on large instructions after previously accepting smaller mandates."
I have some questions for you BigLaw attorneys and observers:
- Is this a novel requirement or is this something that is quietly in place at other firms?
- If novel, will clients go for this?
- What is the consequence if a client who commits to spend $200,000 with a law firm fails to do so? Termination? Or termination, but only if there is a more lucrative client waiting in the wings? Or no termination but the client must write a check for the difference (seems unlikely!)?
Please weigh in.
Posted by Bruce Carton on February 5, 2011 at 05:19 PM | Permalink
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