In this paper we analyze bidding behavior of law firms competing for routine cases in a procurement auction. The distinguishing feature of this auction is that bidders are free to submit bids of an hourly fee, a fixed fee or a combination of the two. We derive the equilibrium properties of this auction in three settings: rational uninformed buyers, naive uninformed buyers, and informed buyers. Informed buyers possess information about the time efficiency of the law firms, in contrast to uninformed buyers. In the case of rational uninformed buyers, there is an “unraveling equilibrium” in which all bidders submit fixed fees. In both alternative models, some bidders bid fixed fees and others hourly fees. The data are inconsistent with unraveling and with the public wisdom that “lawyers always work for an hourly fee”. The empirical results by and large confirm the complete information model. (Joint work with Sander Onderstal)