Hourly rate is a mostly a bad idea. Paying by the hour means you get that – lots of hours to pay. That means it goes on and on and on and on. There is no incentive to quickly resolve. Imagine if lawyers instead were always paid to get a product.
PS – If I were a JP Morgan shareholder, I would be on fire about 9.2 BILLION in legal fees. My guess is that NO ONE BID on this which would have driven legal fees lower. Instead a law firm is chosen (friends?) The companies hiring law firms don’t have incentive to get the lowest / best deal for legal fees (that is what happens when you are spending other peoples’ money, here shareholders.) See below
The calls started flooding into JPMorgan Chase last month.
As settlement talks with the federal government over the bank’s mortgage business heated up, lawyers began aggressively seeking a lucrative piece of work. The lawyers wanted the plum assignment of serving as monitor for JPMorgan’s mortgage operations — a corporate baby-sitting role that is typically part of a settlement.
JPMorgan’s announcement on Friday that it had set aside $9.2 billion to cover its mounting legal expenses — leading it to report its first quarterly loss under Jamie Dimon — underscored how the numerous regulatory woes at the nation’s largest bank are proving to be a boon for the country’s most sophisticated law firms.
Mr. Dimon, JPMorgan’s chief executive, described the legal expenses