A fixed fee with a firm to handle core agreements of a company (Bell Canada)

I have thought that commercial contracts embody the most important legal skills of a department. A core competency, to put it differently, surrounds the preparation, review, negotiation, and interpretation of contracts for the sale of a company’s goods and services (See my post of Dec. 15, 2010: article cited that wonders about contracts.). It therefore surprised me to read in the ACC Docket, Canadian Briefings at 5, that Bell Canada’s legal department has retained an outside firm to “handle its commercial telecommunications agreements on a value-based [fixed] fee arrangement.” Under the three-year deal, the department pays a set quarterly amount for a certain volume of contracts. The department and the firm agreed that if volume is less than 10 percent or more than 20 percent of the negotiated volume they will discuss resetting the threshold.

The piece does not say whether the volume is a block of hours or a number of contracts or some mixture but the department does review hours logged by the firm. The law department is studying whether its in-house lawyers are sending the “right” work to the firm – the temptation would be to load the firm with everything imaginable. The point is also made that turnaround time can shorten if a law firm’s pool of talent can come online during crunch times.