Stacy Joyce, CLM
Locke Lord LLP
[email protected]

Back in the 1960s, the United States Senate Anti-trust and Monopoly Subcommittee was investigating an illegal price-fixing scheme among some big name electrical companies.  During testimony, an executive had this to say about his company’s actions:

“We thought we were doing a job for employees and customers. We wanted to keep people employed in the plant when volume was low.  And we felt we needed a higher profit for research and development activities.”

That quote really resonated with me.  The guy genuinely thought what they were doing was helping people, both the company’s customers and the company’s employees.

The incredulous committee chair, on the other hand, responded, “A higher profit than you could get from free competition?”

We, too, may feel that we have the best interests of our firms, our employees, or our clients when we ask our fellow members how they are handling certain matters, particularly when the economy is tight.  We hear people asking what other firms are doing about raises this year; how much they charge their clients for photocopies; or how much of their benefit costs are borne by their employees.  Of course, I know in my heart of hearts that their intentions are good.  None of us are trying to give our employees the smallest raises we can possibly get away with.  Quite the opposite, we are probably trying to convince our managing partners that we need to stay competitive by keeping up with the Joneses!

Don’t shoot the messenger, but we agreed to avoid these discussions when we signed up for membership in this association.  Our national and chapter bylaws clearly state that we will not “exchange … information or other economic data, which might appear to violate antitrust regulations.”  Ah, there it is – the appearance of impropriety!  Each year when we renew our memberships, we sign off on a statement that says that we are in compliance with the Association’s bylaws and its Code of Professional Responsibility.

As the Antitrust Guidelines clearly state:

“[T]he government may infer a violation of the Sherman Act by the mere fact that all or most of the members of the professional association are doing the same thing with respect to prices.  It is not required that there be an actual agreement, written or unwritten, to increase prices.  Price fixing is a very broad term which includes any concerted effort or action which has an effect on prices or on competition.
Accordingly, professional association members should refrain from any discussion which may provide the basis for an inference that the members agreed to take action relating to prices, production, allocation of markets, or any other matter having a market effect.”

Any discussion – in person, online, or offline.  The guidelines don’t say “don’t discuss these subjects on the Discussion Boards,” they say “don’t discuss them.”

The following topics are also plucked from the Antitrust Guidelines, and I have highlighted some of the ones I hear most often:

• Do not discuss current or future billing rates, fees, disbursement charges or other items that could be construed as “price.”  Further, be very careful of discussions of past billing rates, fees or prices.
• Do not discuss what is a fair profit, billing rate or wage level.
• Do not discuss an increase or decrease in price, fees or wages, or disbursement charges.  In this regard, remember that interest charges are considered an item of price.
• Do not discuss standardizing or stabilizing prices, fees or wages, or disbursement charges.
• Do not discuss current billing or fee procedures.
• Do not discuss the imposition of credit terms or the amount thereof.
• Do not complain to a competitor that his billing rates, fees or wages constitute unfair trade practices.  In this context, another law firm (or even a corporate legal department) may be considered a competitor.
• Do not discuss refusing to deal with anyone because of his pricing or fees.
• Do not conduct surveys (under the auspices of ALA or informally) relating to fees, wages or other economic matters without prior review by antitrust legal counsel.

*                                  *                                  *

The Antitrust Guidelines continue, but I don’t want to lose my audience, if I haven’t already.   You all know where to find them on the chapter website, if you want to read them in full.
This has been a public service message from your semi-retired Discussion Board Police.  Hey, let’s be careful out there!

Stacy Joyce is the administrator of the New York office of Locke Lord LLP.  She can be reached at [email protected].