ATTORNEYS AT LAW

330 MADISON AVENUE

NEW YORK, NEW YORK 10017-5001

(212) 297-3200

SAN JOSE

NEW YORK

SAN FRANCISCO

LOS ANGELES

JESSE B. GROVE III

(212) 297-3202

barrygrove@tmjb.com

FAX (212) 972-6569

June 10, 1996

Anne K. Bingaman, Esq.

Assistant Attorney General

Department of Justice, Antitrust Division

Main Justice Building

10th & Constitution Ave., N.W.

Washington, D.C. 20530

Re: Request for Business Review Letter

Dear Assistant Attorney General Bingaman:

On behalf of the seventeen lawyers identified in the attachment to this letter, this is to request a statement, pursuant to the Department of Justice Business Review Procedure, 28 C.F.R. § 50.6, of the Department's present enforcement intentions regarding a proposal by the said lawyers to offer a new form of legal services to clients engaged in the U.S. and international construction industry.

Participants in the construction industry (owners, contractors, design professionals, subcontractors and suppliers) have rebelled against the cost, inconvenience and uncertainty of traditional dispute resolution through arbitration or litigation. While the industry has embraced many forms of alternative dispute resolution (ADR) such as mediation, dispute review boards and partnering, ADR frequently produces unsatisfying results inconsistent with perceived contract rights and obligations. To ameliorate these industry concerns, a group of seventeen senior construction lawyers from sixteen unrelated law firms in thirteen different cities propose to offer a new form of legal service to be known as Flat Fee Dispute Avoidance.

The essence of the service is that the participating lawyers will guide their respective clients through a construction project from contract structuring through performance and dispute resolution so as to entirely avoid entanglement in arbitration or litigation. While it may be appropriate to employ certain forms of ADR, such as partnering, the lawyers involved will

Anne K. Bingaman, Esq.

June 11, 1996

Page 2

seek to promote consensual dispute resolution through reasonableness and compromise. Current forms of representation foster tendencies to prolong and intensify disputes, whereas this new approach would create the opposite incentives. The lawyers and their firms are sufficiently convinced of their ability to avoid prolonged disputes that they are willing to share the risks with their clients by offering representation for a flat fee returnable in full if, at either client's discretion, litigation or arbitration should be required.

The services will be offered and promoted by group members on the basis that each major participant in a construction project (e.g., owner, contractor and design professional) will hire a member of the group, and that all of the members who are retained will accept the same flat fee and refund structure so as to assure that there are shared incentives. The obvious financial risks to the group members will generally be acceptable to them because they each have confidence in the judgment and ability of the others, and they know that each will have the same risks and incentives. Each member will be free to establish the proposed amount of his flat fee independently, and each member will be free to compete for the business on the basis of the fee he proposes to charge. Each member and firm will also be free to market services independently on the same or different terms, and with or without participation by other group members.

This new service will be offered on a national and international basis and there is considerable geographic dispersion among the group members. The group consists of only seventeen of the thousands of lawyers that practice in the construction and ADR areas (the current membership of the American Bar Association Forum on the Construction Industry, the professional group to which most construction lawyers belong, is over 5,000). Accordingly the participants do not have market power.

The participating attorneys who propose this service will remain free to withdraw from the program at any time and to accept client engagements on other or similar terms without withdrawing from the program. Thus, for example, a member is free to accept an engagement on exactly the same terms as this program contemplates except that his counterpart is not a member of the group. There will nothing to prevent any competing group from offering the same service on the same terms.

To the extent that this service successfully avoids traditional dispute resolution, it should be financially beneficial to the clients because their gross legal fees will likely be less than they are currently experiencing, and the fixed nature of the fee allows for reliable budgeting and planning. Thus, from the standpoint of the client consuming these legal services, the services will

Anne K. Bingaman, Esq.

June 11, 1996

Page 3

be purchased because, among other things, there is both certainty as to and an overall reduction of the legal costs incident to a specific construction project.

Thank you for your consideration of this request.

Yours truly

Jesse B. Grove, III

JBG/jh

DOCS_NY #11546 v1 /8WQ01!.DOC

Participating Counsel List

Philip L. Bruner, Esq.

Faegre & Benson

90 South 7th Street, #2200

Minneapolis, MN 55402-3901

Phone: 612/336-3000

Fax: 612/336-3026

Joseph F. Canterbury, Jr., Esq.

Canterbury, Stuber, Pratt, Elder & Gooch

1300 One Lincoln Centre

5400 LBJ Freeway

Dallas, Texas 75240

Phone: 214/239-7493

Fax: 214/490-7739

Kenneth M. Cushman, Esq.

Pepper, Hamilton & Scheetz

3000 Two Logan Square

Eighteenth & Arch Streets

Philadelphia, PA 19103-2799

Phone: 215/981-4073

Fax: 215/981-4750

A. H. ("Nick") Gaede, Jr., Esq.

Bradley, Arant, Rose & White

1400 Park Place Tower

2001 Park Place

Birmingham, AL 35203

Phone: 205/521-8323

Fax: 205/252-0264

J. Bert Grandoff, Esq.

Carlton, Fields, Ward, Emmanuel,

Smith & Cutler

P.O. Box 3239

Tampa, Florida 33601-3239

Phone: 813/223-7000

James P. Groton, Esq.

Sutherland, Asbill & Brennan

999 Peachtree Street, N.E.

Atlanta, Georgia 30309-3996

Phone: 404/853-8071

Fax: 404/853-8806

Jesse B. ("Barry") Grove III

330 Madison Avenue

New York, New York 10017

Phone: 212/297-3202

Fax: 212/972-6569

Alan E. Harris, Esq.

Farella, Braun & Martel

Russ Building, 30th Floor

235 Montgomery Street

San Francisco, CA 94104

Phone: 415/954-4424

Fax: 415/954-4480 or 4481

Paul M. Lurie, Esq.

Schiff, Hardin & Waite

7200 Sears Tower

Chicago, Illinois 60606

Phone: 312/258-5660

Fax: 312/258-5600

Robert L. Meyers, III, Esq.

Jones, Day, Reavis & Pogue

2300 Trammel Crow Center

Dallas, Texas 75201

Phone: 214/969-4829

Fax: 214/969-5100

James J. Myers, Esq.

Gadsby & Hannah

125 Summer Street

Boston, MA 02110

Phone: 617/345-7000

Fax: 617/345-7050

Christopher L. Noble, Esq.

Hill & Barlow

One International Place

Boston, MA 02110

Phone: 617/428-3133

Fax: 617/428-3500

Jotham D. Pierce, Esq.

Pierce, Atwood, Scribner, Allen,

Smith & Lancaster

One Monument Square

Portland, ME 04101

Phone: 207/773-6411

Fax: 207/773-3419

Hugh E. Reynolds, Esq.

Locke, Reynolds, Weisell & Boyd

1000 Capital Center South

201 North Illinois Street

Indianapolis, IN 46204

Phone: 317/237-3800

Fax: 317/237-3900

Robert A. Rubin, Esq.

Postner & Rubin

17 Battery Place

New York, New York 10004

Phone: 212/269-2510

Fax: 212/425-0968

Carl M. Sapers, Esq.

Hill & Barlow

One International Place

Boston, Massachusetts 02110

Phone: 617/439-3555

Fax: 617/439-3580

Robert J. Smith, Esq.

Wickwire Gavin, P.C.

Two East Gilman Street

Suite 300

Madison, WI 53701-1683

Phone: 608/257-5335

Fax: 608/257-2029