Pfizer Hires Jackson Lewis

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employmentcrossing
August 22, 2008

The billable hour has always been here, it seems. And the rates keep climbing, making companies swoon from the shock of their legal bills. The pill is particularly bitter to swallow when you pay ...

The billable hour has always been here, it seems. And the rates keep climbing, making companies swoon from the shock of their legal bills. The pill is particularly bitter to swallow when you pay millions and still lose. Well, Pfizer, the major pharmaceutical company, has taken steps to reduce the shocks it receives.

From the start of the year through the end of 2009, Pfizer will pay law firm Jackson Lewis a capped fee to handle all of its employment work. No billable hours, no per-matter fees; just one sum paid out monthly over the course of the year. A flat rate, in other words.

Under the agreement, Jackson Lewis gets any employment-related legal work that comes in the door for the next two years, including single-plaintiff discrimination cases, equal employment opportunity matters, class actions, and general advice and counsel. That means everything employment related, no matter how large or small.

In return, Jackson Lewis is being paid one-twelfth of the annual capped fee each month. Jackson Lewis sends an account to Pfizer each month detailing the time spent. An end-of-the-year reconciliation will allow Pfizer to recoup any money left on the table. This means the billable hour is not totally dead -- but it's dying here.

While the capped fee arrangement for outside legal work appears to be a relatively recent innovation, Pfizer isn't the first to grant some of its legal work to a single firm. Tyco International did the same thing in 2004 when it outsourced all of its product liability work to Kansas City's Shook, Hardy & Bacon, and its corporate matters to New York's White & Case. And this year, at least two more companies -- Honeywell International and Brady Corporation -- have picked up on the one-firm idea.

Margaret Madden, the head of Pfizer's employment-law group, said the company chose Jackson Lewis, in part, for its willingness to forgo time-based billing. "Jackson Lewis got it because they recognized that we needed to find s

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