Pfizer, AmEx, Cisco Lead Charge Against Hourly Legal Billing

With the recession crimping legal budgets, some big companies are fighting back against law firms' longstanding practice of billing them by the hour.

The companies are ditching the hourly structure -- which critics complain offers law firms an incentive to rack up bigger bills -- in favor of flat-fee contracts.

Pfizer Inc., which spends more than $500 million a year on legal matters, says it expects to reduce its domestic law-firm spending by 15% to 20%, largely through flat-fee arrangements. It will pay 16 law firms lump sums to handle various portfolios of work, such as litigation and tax matters. "I have told firms you cannot make your historical profit margins" on Pfizer work, said the pharmaceutical giant's general counsel, Amy Schulman.

At Sidley Austin LLP, Sara Gourley, a partner, said changes made by Pfizer have given her more freedom to put the best mix of lawyers on a legal matter. Pfizer used to have a rule that no lawyer with an hourly rate higher than a second-year attorney's could bill the drug company for legal research. Now that costs are fixed, Ms. Gourley says, she has been able to assign a senior associate to perform Pfizer legal research who could get the answers much more quickly than a junior lawyer might. (WSJ)

Gut Reactions: Moral Conviction, Religiosity, and Trust in Authority

Gut Reactions: Moral Conviction, Religiosity, and Trust in Authority

Daniel C. Wisneski, Brad L. Lytle, and Linda J. Skitka
Psychological Science: Research, Theory, & Application

Morality and religiosity are often thought to go hand-in-hand, but theories in moral development suggest that religious beliefs tend to require the ongoing presence of external leaders and rules, while moral beliefs are held even in the absence of such authorities and institutions. New research shows morality and religiosity also have different effects on our trust in political leaders. When volunteers were asked about a controversial issue, those with stronger moral convictions expressed greater doubt that political authorities would make the "right" decision about the issue, while religious people had more trust in the political authorities. Results also suggest that these opinions stem from gut reactions rather than deliberation. (Psychological Science)