MyFondia VirtualLawyer
October 30, 2014

Does the fixed priced legal service give General Counsel any benefit?

For centuries, it has been a common practice to buy legal services on hourly rate. Sometimes customers ask for a fixed fee for a certain project. Why not to discuss with the legal service provider about a fixed price for the company's day-to-day legal matters?

I propose one case where the fixed fee would give a lot of benefit to the General Counsel. Having acted as a General Counsel myself it was always a challenge to find a law firm abroad which would take over all responsibility of a subsidiary's day-to-day legal matters and proactively help the local managers in their business.

I can give you one example where the fixed fee has served the General Counsel well for years. A major international company made an agreement with us to take care of all its Finnish subsidiary's daily legal matters for a permanent fixed monthly fee. Certain kinds of major projects, like M&A and litigations have been excluded from the fixed fee. There are also other General Counsels of foreign parent companie who have ordered continuous legal support from us and are now discussing changing the charge to a fixed monthly fee.

We take care of all legal matters and report to the General Counsel in the way he/she wishes. We prefer to start with a so-called legal analysis including interviewing the CEO, CFO and other relevant managers in order to get the overall picture of the business and what needs to be done. The report on the findings serves also as the basis for discussion about the volume of the work and the fixed price.

The overall benefits for General Counsel are that he/she will not be surprised by the bill and thus it will also be easier to make the legal unit's budget. Most important of all is the trust in the local lawyer who takes care of all important legal aspects of the business and the legal risks are minimized. The local business managers can concentrate on the business.