King & Spalding’s Federal Reserve engagement carries a $1.5 million cap

On September 10, Reuters reported from newly disclosed records that King & Spalding’s engagement for the Federal Reserve in a Justice Department investigation was capped at $1.5 million, twice the contract’s original $750,000 maximum. The lawyers’ discounted hourly rates were redacted, but the cap shows how a sophisticated public client can combine hourly inputs with an aggregate budget boundary. For firms, this structure concentrates overrun risk unless scope changes, assumptions and escalation rights are defined before work accelerates. Pricing teams should also distinguish a revised cap from a successful fixed fee: doubling the ceiling suggests that change control and early forecasting mattered as much as the initial number.