Today is the anniversary of one of the most momentous events of English history. 800 years ago King John met the rebellious Barons at Runnymede and set his seal to the Magna Carta or ‘Great Charter”. The document was a peace treaty between the King and his Barons and guaranteed that the King would respect feudal rights and privileges, uphold the freedom of the church, and maintain the nation’s laws.
Clause 39, of 63, is seen as a key article as it states “no free man shall be arrested or imprisoned or disseised [dispossessed] or outlawed or exiled or in any way victimised…except by the lawful judgment of his peers or by the law of the land.” This clause has been celebrated as an early guarantee of trial by jury and of habeas corpus and inspired England’s Petition of Right (1628) and the Habeas Corpus Act (1679).
I thought about the Magna Carta in the context of one of the loudest and largest complaints from Chief Compliance Officers (CCOs), compliance practitioners and indeed corporations around Foreign Corrupt Practices Act (FCPA) compliance. That is the cost of outside counsel in the delivery of compliance services. Many commentators rail against the high cost of both FCPA investigations and remediation’s.. Much of this high cost is driven by law firms that bill by the hour.
Stephen Fairley, who runs the Rainmaker Institute, has written extensively about the high cost of hourly billing and alternative fee arrangements (AFAs). In a blog post, entitled “Considering Alternative Fee Arrangements? Here’s How to Make Them Work for Your Firm (1 of 2)”, he cited to Vincent Cino, Chairman of Jackson Lewis PC, who told American Lawyer, “The billable hour is directly opposed to the best interest of the client and to the provider of service because by its very nature it adds an artificial barrier to the accomplishment of the only real objective, which is a quality legal product for a set and expected price.” Fairley went on to state, “One of the most common AFAs is the fixed or flat fee arrangement”.
So today I am announcing a new service offering of compliance consulting for a fixed monthly fee. For this fee you can have a set number of hours of compliance consulting services from myself. While Fairley’s quotation and comments certainly resonate with me, I saw this approach work when I was an in-house counsel at a major corporation where the lawyers never kept a record of what they worked on. The reason for this was that the Law Department heads did not want anyone on the business side wondering how much a phone call to the corporate legal department was going to cost them. The legal department was funded through a straight overhead charge to the operating unit; in other words a fixed fee, set annually. The law department wanted the business unit folks to always call with questions so they made it as easy and inexpensive as possible.
I have long thought about that concept and that model in the delivery of compliance services. The purpose of my new service offering is to allow a CCO or compliance practitioner who may need the services of a Subject Matter Expert (SME) in the nuts and bolts of FCPA compliance to have a low-cost, yet first class, resource which they can call upon with any questions at anytime and know what their monthly cost will be. I want to give a client every incentive to pick up the phone and call me as their SME, without worrying about how much the phone call is costing.
But I have other reasons for this new service offering. The fixed fee arrangement benefits both side of the equation, the lawyer and the client. Lee Rosen, a North Carolina attorney, has written extensively on fixed fee arrangements for counsel. In a blog post entitled “Hourly Billing Kills Your Art” he said, “Fixed fees let lawyers be artists. They let us do what needs doing even if it’s not something that’s economically justifiable. They let you as a lawyer release the imaginative, creative inner lawyer that too often stays bottled up inside because of the economic constraints resulting from clients feeling the pressure to pay the bills.” If there was ever a practice that was more art than Black Book law, it is FCPA compliance. A fixed fee arrangement allows me to work on the art part of it in a way that will benefit clients, yet not cost an arm and a leg.
So on this anniversary of a seminal event in English history and one that we Americans celebrate as equally important to our national character, you now have the opportunity to consult with a SME on the ‘nuts and bolts’ of FCPA compliance on a cost-effective way that I am sure you will find most innovative and useful for your compliance program. If you are interested in finding out more contact me at my email address listed below and we can discuss the specifics of my new FCPA fixed fee consulting practice offer.
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© Thomas R. Fox, 2015