XX ……….., INC. GUIDELINES FOR NON US-BASED OUTSIDE COUNSEL ON FEES, BILLING AND DISBURSEMENTS

 

The following guidelines regarding fees, billing, disbursements and related administrative matters are applicable to non US-based outside counsel providing legal services to XX.,……Inc. and its subsidiaries and affiliates (collectively, “XX”). These guidelines apply equally to all offices of a legal firm unless otherwise agreed and may be supplemented or amended by specific arrangements agreed for particular XX business units, offices or transactions.

 

 

I. Fees

 

1. In General. Unless otherwise agreed in advance, we will pay for legal services based on customary and reasonable billing of the individuals performing the services (i.e., the product of the amount of hours productively devoted to a matter and reasonable hourly billing rates for the individuals involved), without any “premium”. We expect that the partner in charge of a particular assignment will ensure that the matter is staffed in the most effective and efficient manner (i.e., that partner-level work is performed by partners, associate-level work is performed by associates, paraprofessional-level work is performed by paraprofessionals, etc.), that needless expenditure of resources will be avoided (such as sending additional lawyers to meetings or depositions when unnecessary), and that, in billing the matter, the partner will exercise judgment regarding whether the hours recorded were in fact productively spent on the assignment. In addition, you should not charge us for time spent educating or training junior personnel to provide the services required.

 

The hourly rates that you charge XX should be no more than the rates you charge other institutional clients (other than non-profit organizations and pro bono clients) for comparable work. Please provide us with your current standard hourly billing rates.

 

For certain matters, it may be appropriate for XX and outside counsel to agree on an alternative fee arrangement, such as reduced hourly rates for certain types of work or a fixed fee for a particular transaction. We may initiate discussion of alternative fee arrangements, and we encourage you to consider alternatives and suggest them to us.

 

We assume that all fees will be calculated in accordance with these guidelines and that any variations.

 

2. Premiums. We will not accept “value-added” or “premium” billing (i.e., any amount in excess of the product of the amount of hours reasonably devoted to a matter and reasonable hourly billing rates for the individuals involved) unless the amount of the proposed premium and the reasons therefore are discussed with, and agreed to by, the responsible XX professional before the work is undertaken. In all events, the amount of any premium must be clearly disclosed to us.

 

3. Estimates and Updates. Before retaining outside counsel in connection with a new matter and occasionally during the course of a matter, the responsible XX professional may request an estimate of, or cap on, your fees and disbursements for the matter. It is important that any estimates or caps given are realistic to avoid misunderstandings arising. This applies equally to cases where the person ultimately paying the bill is a XX external client as to cases where XX will be paying for the services rendered. While we recognize that a preliminary estimate may need to be revised as a matter progresses, proposed changes to the estimate should be discussed with, and approved by, the responsible XX professional on a timely basis.

 

For most assignments, whether or not a preliminary estimate is requested, outside counsel should keep the responsible XX professional informed on a regular basis about the level of fees incurred. For example, the XX professional may ask outside counsel to indicate when the fees reach a specified amount and specified increments thereafter (e.g., when the fees reach the equivalent of $25,000 and each $10,000 thereafter), and in the case of certain areas of the firm or types of engagements, we may ask to be advised when fees are anticipated to reach certain levels. In addition, we expect that outside counsel will inform the responsible XX professional of any unusual or unexpected circumstances that may lead to an increased fee. We are unlikely to be sympathetic to requests to render a bill larger than an estimate in cases where no indication has been given that the estimate is likely to be exceeded.

 

4. Competitive Bidding. In appropriate circumstances we may invite competitive quotes for certain projects, including by way of on-line systems. In such cases it will be even more important that any estimates or hourly rates provided are realistic and not subject to change absent exceptional circumstances.

 

 

II. Timing of Billing

 

1. Frequency. In general, outside counsel should submit statements for work on non-transactional matters (e.g., litigation matters or general tax or regulatory advice) on a monthly basis. If agreed by the responsible XX professional, you may submit statements for non-transactional work on a less frequent basis, but in all events bills for non-transactional work must be submitted no less often than quarterly. For transactional work, you should discuss with the relevant GS lawyer whether statements generally should be submitted when the transaction is closed or every month.

 

2. Timeliness. All bills must be submitted within 30 days after the end of the applicable billing period or the closing of a transaction. For certain matters, we may request that a proposed bill be submitted within the 30-day period with a final bill to follow when the amount has been agreed.

 

For a number of reasons it is more difficult to arrange payment of bills after delays (for example, XX personnel may leave the firm or funds may close their financial years). Bills not delivered in accordance with these policies are therefore at risk of not being paid or being subject to a request for a substantial reduction.

 

 

 

III. Billing Format

 

To reduce potential delays in payment you should ensure that each bill references a single matter only. In some cases it may be possible to have more than one matter on each bill, but this should be discussed with the relevant XX lawyers before production. We now require all invoices to be supported with a complete copy of your computer time records.

 

Statements must contain the following information for each matter (treating general advice as a single matter) your firm is handling:

 

·        a distinct invoice number that identifies the statement;

 

·        a general title or description of the matter (e.g., for a litigation matter, the full name of the first-named plaintiff and the first-named defendant, or the collective caption under which a number of cases are carried; for general advice, a description of the category of advice) or transaction covered;

 

·        the time period covered by the statement or, if the statement covers an entire transaction, the commencement and closing dates of the transaction;

 

·        a detailed description of the services performed during the billing period, including:

 

(a) the name of the principal XX representatives, both legal and business, involved in the matter,

 

(b) the XX department(s) for which each such XX representative works;

 

(c) any XX client involved in the matter; and

 

(d) the names of each partner, associate and paraprofessional at your firm who performed services during this period and the amount of time spent by each; in the case of litigation matters, this information should be provided by standard categories (e.g., pre-discovery, discovery, post-discovery, trial, appeal, etc.) and, in the case of a statement relating to general advice, this information should be provided by discrete tasks performed (e.g., advice with respect to the application of Reg S to a specified type of offering);

 

·        the fee for the services performed (by category, in the case of litigation matters, and by task, in the case of general advice);

 

·        an itemized list of any reimbursable expenses and disbursements incurred during the billing period (as described in Section IV below); and

 

·        any additional breakdown or information requested by the responsible XX professional (e.g., back-up on particular disbursements).

 

We expect the above details to be provided by all overseas lawyers even if their bill is shown as a disbursement to your own.

 

From time to time, we may require you to provide a full copy of your computer time keeping records for review by our lawyers or external cost consultants. It is important, therefore, that all lawyers include appropriate and suitably detailed narrative as to tasks undertaken for each time entry.

 

 

IV. Expenses and Disbursements

 

We expect that your hourly rates cover incidental expenses and disbursements in the nature of your general overheads and we will not pay for these separately, except as set out below. We are prepared to agree alternative arrangements if hourly rates are lower. If you believe that special circumstances justify an exception to these guidelines, please obtain the permission of the responsible XX professional with whom you are dealing before incurring the expense.

 

1. Actual Expenses Incurred at Your Offices.

 

 

·        Messenger Services; Couriers. We will reimburse you for actual third party charges billed to you for deliveries, including overnight express, that are, in your judgment, necessary. We will not pay for your own messengers.

 

·         Car Services. We will reimburse your actual out-of-pocket cost of car services used by your personnel who work overtime past 9 pm and who have worked at least 4 hours on a XX matter that day. The foregoing policy is subject to the further condition that we will reimburse such car-service expenses only if and to the extent your firm would reimburse your personnel for such expenses if they were working on matters for your firm (rather than a client).

 

 

2. Expenses While Travelling on XX Business.

 

·        Air Travel. We expect our outside counsel to adhere to the same travel guidelines applicable to XX personnel. In that respect, first class travel is not permitted (except for flights between Hong Kong and China or within China). We will reimburse business class travel for trips over 5 hours. In all other cases, we will reimburse only coach travel. We will advise you in the event our internal travel guidelines change.

 

·        Other Travel Expenses. We will reimburse reasonable and necessary hotel, meal and ground transportation expenses incurred when your personnel are travelling on behalf of XX.

 

3. Third Party Invoices. Invoices rendered by third parties (e.g., consultants, translators, experts, court reporters, local counsel or barristers) for work that you engage to be done on our behalf should ordinarily be paid directly by you and billed to XX at cost. Please provide us with copies of the invoices received by you for such services with your bill. We expect that you will obtain our consent before agreeing estimates and fees or employing such persons.

 

4. Miscellaneous Expenses. We will generally reimburse other necessary and reasonable expenses incurred on a XX matter, if agreed with us before they are incurred and where clearly disclosed in your statement. We will not reimburse expenses such as internal e-mail, telephone calls, faxes, photocopying, secretarial or word processing services and packages sent between your office locations in an interoffice pouch.

As in the case of fees, we expect these guidelines to be followed and that any proposed variations will be brought to our attention in advance, by explicit request.

 

V. Other Administrative Matters

 

In order to facilitate prompt payment of statements submitted by outside counsel to XX, it is extremely important that the original copy of statements be sent to the

lawyer most closely involved in the relevant matter.

 

 

[Date]

 

 

Signed…………………………………….Law Firm.

 

 

Signed………………………………………XX