Senior in-house lawyers open to early-payment discounts but are yet to take initiative

Some senior in-house lawyers at global companies would be willing to pay in advance for routine legal work in return for a discount on fee levels it has been claimed.

General counsel at companies including Coca-Cola told Legal Week they would be happy to pay fees upfront as long as they received a significant discount on rates.

However, most said firms had not approached them about discounts despite predictions that the economic downturn could force them to reduce normal fee rates.

Coca-Cola European group general counsel Christopher Barnard said he could be persuaded to adopt the model if the discount was significant.

He said: "You would have to determine whether the discount was worth the advanced payment of fees, the company would have to be sure that the work would come in on time, at the agreed cost, and that the timeline was clear."

Nayeem Syed, general counsel of media company Eros International, argued that pre-payment would work for routine instructions but not for complex matters.

Syed commented: "It would have to be considered on a case-by-case basis but it would suit a series of similar transactions that were absolutely going to be done. It is a novel approach but it is something I would look at."

However, some general counsel were more sceptical, arguing that paying upfront could lead to future problems. ITV group legal director and general counsel Andrew Garard said: "I am very happy to agree a payment structure in terms of milestones, but I would be wary of paying upfront. If things go wrong, there can be no redress. When you pay upfront you are a hostage to the future."

Costs lawyer Jim Diamond of Legal Budgets claimed that clients could save up to 30% on fees by paying upfront and urged general counsel to be more proactive to cut costs further.

He said: "What it boils down to is that this is a buyers' market. With routine work general counsel can go and negotiate and would be likely to get whatever fees they want within reason."

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