Billing Practices of Labor Arbitrators: Evolving Fee Patterns
Zirkel, Perry A., Labor Law Journal
This review of the research literature provides a concise but comprehensive synthesis for interested individuals, including arbitrators and researchers, who seek empirical information on the billing practices in the profession of labor arbitration. Upon careful compilation, the scattered studies provide a picture of the evolving pattern for per diem, cancellation, and other fees.
PER DIEM FEE
Research studies for the three decades starting in the 1960s reveal that per diem fees have steadily increased, on average but within a rather wide range, in approximate relation to the cost of living. The basis for calculating a day did not change significantly, but the average number of days per case increased notably from 1970 to 2003.
Specifically as to the per diem fee, Power reported FMCS data that the average for its arbitration cases was $141 in 1968 and $173 in 1972.1 Alien's 1975 survey of NAA members and nonmembers (response rate = 36%) revealed that the average per diem fee at the time for the respondents was $217.2 In a follow-up study of Academy members (response rate - 46%) in 1987, Jennings and Alien found that the average fee had increased to $444, which was slightly less than the increase in the consumer price index.3 In Bognanno and Smith's 1987 survey of 614 NAA members (usable response rate = 58%) and 702 nonmembers (usable response rate = 37%), the average per diem rate for grievance cases was $436 for NAA respondents and $375 for nonmember respondents. Based on a separate survey item, they found that the average per diem fee for interest cases was - in comparison to grievance cases - higher ($473) for Academy members and lower ($365) for non-members, but these cases were a relatively small part of both groups' case load.4 Finally and most recently, FMCS reported that the average per diem, which is per case rather than per arbitrator under the agency's broad aegis, was $721 in fiscal year (FY) 2002 and $764 in FY 2003.''
As for the basis of the per diem, however, Alien and Jennings' successive surveys of Academy members in 1975 and 1987 found that the average number of hours used to calculate the per diem fee remained the same at 6.8/' Begin and Zigarelli's 1994 Academy membership survey (response rate = 38%) reported, without further detail and without differentiation among grievance, interest, and other neutral-role cases, that the average definition of a billing day was 6.66 hours, with wide variance, and that "there was some evidence that study/research days are billed at a fewer number of'hours [than hearing days]."7
As to the number of days charged per case, Jennings and Alien reported, based on their successive NAA-member surveys, that the average had increased to a statistically significant extent, from 2.6 days in 1975 to 2.7 days in 1987.8 Analyzing FMCS data (thus, a much broader sample) for a longer period, Zirkel and Krahmal found that the annual average days charged per case increased rather steadily, but with some variation, from in 2.9 in 1970 to in 3.7 in 1998. The primary components were hearing days, which increased on average from .9 to 1.1, and study/research days, which increased on average from 1.7 to 2.3 study days during this period.9 The most recent available FMCS data show a further increase to an average of 4.0 days per case in 2003, with hearing days averaging 1.2, and study/research day averaging 2.4.'"
Additionally, Petersen and Rezler's 1977 survey of 85 members of the NAA (response rate = 45%) and 113 members of the midwest region of AAA (response rate = 55%) included other items related to the per diem rate. Most respondents charged for travel time but the threshold for including such a charge varied widely, with the predominant proportion consisting either of a minimum of 1-2 hours (28%) or 3-4 hours (37%) each way. Additionally, when asked whether the amount of their fee affected their case load, approximately 80% of each group answered "No. …