December 28, 2009
A recent article, An Increase in Hourly Rates? Get Ready for a Fight in Corporate Counsel sees a fight looming over 2010 hourly rates. In the article, "Susan Blount, the general counsel of Prudential Financial sent a letter to 60 law firms the insurance giant uses regularly. The letter addressed the general economy and the need to cut costs, but one announcement stuck out: Prudential informed the firms that in calendar year 2010, the company expected to pay for legal services at 2008 hourly rates. It wasn't a request as much as a take it or leave it deal, Blount says."
"How hard will the law firms fight? Are they willing to lose client business in order to take a stand on rates? Paul Hurd, general counsel of Daimler Trucks North America, says only "a couple of the firms Diamler Trucks uses parted ways with the company over last year's rate cuts. Blount says none of the 60 firms Prudential contracts with have said "no thanks" yet, though she says she is receiving letters from firms explaining why the proposed cuts shouldn't apply to them. "They are detailing why they are special", she says. But she is ready to defend the cuts. "We find ourselves at an economic crossroads in 2009," she says. "We have a special obligation to the company to be smart purchasers of legal services. We're not trying to undermine the economics of law firms. We are looking for the right way to get high quality work for our company at a reasonable price."