Alternative Billing

• Definitions
• Case study findings
• Hypothetical

A Modest Hypothetical Concerning the Business and Ethical Implications of Alternative Billing Practices

Suppose you fly to Europa and have a sudden craving for a hamburger. Fortunately, all of the major fast food restaurants can now be found throughout Europa. So you go into a well-known, world-wide chain and ask for a hamburger and fries. The person at the counter says no problem, his name is Monsieur Albert, he has had over ten years experience in making burgers and it would be his pleasure.

"How much will that be?" you ask.

"Ah," says Albert, "This must be your first visit to Europa and our restaurant," and you tell him that is correct.

"In that case," says Albert, "you should be aware that all of our outlets, as well as over 10,000 other restaurants throughout Europa, are members of the Allied Burger Association, and all of these restaurants adhere to the ABA's rules of ethics.

It seems curious to you that any of this has anything to do with ethics. Maybe business practices, yes, but it is hard to understand why Albert suddenly has raised the subject of ethics. But never mind; you are hungry and you need food.

Albert tells you the price of your burger and fries will be calculated in accordance with ABA Model Rule 1.5, thus taking into account:

The time and labor required, the novelty and difficulty of the procedures involved, and the skill requisite to make the food you have ordered;
The likelihood, if apparent to you, that filling your order would preclude the restaurant from serving other customers who might be standing in line;
The fee customarily charged in the locality for burgers and fries;
The amount of food involved and the results obtained;
The time limitations imposed by you or by the circumstances;
The nature and length of the relationship between you and that particular restaurant;
The experience, reputation and ability of the cooks making the food; and
Whether the fee is fixed or contingent.
Albert then tells you that you are encouraged to check with other chefs at other restaurants before agreeing to this arrangement.

By now, you find this process not only curious, but actually bizarre. First, you still don't understand what ethics has to do with your desire to get a company to do its business - here, make you a burger and fries. But in any event, when you ask what other customers do in similar circumstances, Albert tells you they pay what shows up on the register. Now that seems a lot more familiar to you, so you say that will be fine. But you also ask how the register will take into account the eight factors in ABA Model Rule 1.5, and Albert responds that it really doesn't; the register just totals up the hours, times a rate, and tells you how much to pay. "What happened to the other factors?" you ask, and Albert just looks at you blankly.

"So who will be working on my burger?" you ask, since this will be the major - possibly only - factor that will determine how much your lunch will cost. "I will supervise," says Albert, "but most of the work will be performed by Denise, who has five years experience, and she will be assisted by five to ten others, most of whom were hired yesterday but come from the finest universities throughout Europa."

"Okay," you say, "I'm hungry; I need to eat soon; let's get on with it."

About an hour later, having heard nothing from Albert, you go back to the counter and speak with George. (Albert, you are told, has moved on to a competing chain.)

And how's your hamburger coming? "Well," says George, "Denise has been working on an interesting new sauce; three of the new hires are learning how to cut onions, tomatoes and pimentos but haven't yet decided whether to dice them or do them in regular slices; and three others are trying out some new recipes for mayonnaise and catsup."

"Can't you just buy these ingredients off the shelf?" you ask. "Oh no," replies George; "that's not how we do it in Europa."

"Just give me my burger," you say, "with whatever onions, mayonnaise and catsup you have; I never even talked to you about pimentos or special sauce, so I'm not going to pay for that." "Fine," says George. "Your bill comes to $85.50."

Now that seems rather extraordinary, and you ask for a printout from the register. George and you then look at the register's printout of total hours and conclude that most of the new-hires' time really shouldn't be charged, and you eventually settle on a bill of $35, which still is exorbitant, especially since you are told this still doesn't include the time to clean the kitchen and floors after closing, which you are told customarily is charged to customers eating at Europa restaurants, and a final bill thus will be sent to your hotel by the end of the week.

* * *

COMMENT:

If this seems like an un-businesslike, maybe unprofessional and possibly even unethical way to sell hamburgers and fries, imagine how U.S. clients are feeling about their legal services. Put another way, is the status quo really "ethical"?

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