At Legal Week:
Wal-Mart has demanded a freeze on across-the-board rate increases from its outside counsel, claiming that associate salary hikes have had an unacceptable impact on law firm billing rates.
A memo sent out last week by the retail giant to the relationship partners at its network of outside counsel said that while the salaries firms chose to pay junior associates were “none of its concern,” the company was worried by the impact pay hikes were having on charge-out rates.
Associate general counsel Miguel Rivera said in the memo that the New York benchmark of $160,000 salary for newly qualified solicitors was being used as a measure by other firms in other cities.
Rivera wrote: “Based on the size and frequency of the rate increase requests that we have seen in the past three years, it appears that many of the requested increases are largely attributable to the steady nationwide increase in junior associate salaries.”
So associate salaries are “none of its concern,” but Wal-Mart demands they be kept at a certain number.
Wal-Mart has every right to question every line up on the bills they receive from their lawyers. But a public reprimand of those lawyers for their internal decision looks like nothing more than a crass public relations stunt. The quote from one of their general counsel confirms that with the same “everyday” “great value” language as their own ads.
There are two parts of every lawyer-client relationship: money and loyalty. The money is a business negotiation, but we’re not selling hotdogs here, we’re selling a personal service, one that intrudes upon the most private and sensitive and important matters of people’s lives, and one that can affect them for the rest of their lives. It’s more than a transaction; it’s a relationship, one that demands loyalty.
There’s no obligation to retain clients who abuse you, whether by being coy or untruthful or by using you for their own PR purposes. It doesn’t matter who it is — it doesn’t matter if it’s Wal-Mart — loyalty has to be a two-way street.