Wal-Mart Isn’t Gonna Take it Anymore – Rate Increases, That Is

In a memo sent to its relationship partners at outside law firms, Wal-Mart’s associate general counsel said the company was concerned about the effects of increasing starting salaries on billing rates. Miguel R. Rivera Sr. said in his Nov. 1 memo – first posted on the Wall Street Journal’s Law Blog – that Wal-Mart was putting a halt to across-the-board rate increases.

“In an effort to address some of our concerns about hourly rates for legal services, we are today announcing a moratorium on across-the-board rate increases,” he said. “Until further notice, we will only consider reasonable, individual requests for rate increases for those attorneys in your firm who are performing at an exceptional level and whose experience and knowledge is adding substantial value toward meeting Wal-Mart’s legal objectives.”

Any requests for rate increases have to be submitted to the company by December 15. Wal-Mart did ask for suggestions from its clients on how to control rates for services provided by junior associates. Regardless of whether the firms have ideas, Rivera said the company wants to see data on associate billing rates from its firms beginning with the class of 2004 through the class of 2007. It wants names, locations, work performed, rates charged and hours billed, all by Nov. 30.

If a firm objects to submitting the information, it has to e-mail Wal-Mart by Nov. 12.

“The salaries that law firms choose to pay their junior associates are none of our concern,” Rivera said in the memo. “We have every reason to be concerned, however, about the impact of salary hikes on law firm billing rates.”

Would you submit the information if Wal-Mart was a client? Is its legal work worth it? Or is Wal-Mart just responding to a legitimate problem in the industry when it comes to continually increasing starting salaries?

Could other, smaller corporations yield this power? Let us know what you think by responding to the blog.

~Gina Passarella, Staff Reporter

Explore posts in the same categories: Corporate Counsel

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