You and LL may very well be right about the billable hours NOT being on the "expense" side of the deal and substituted for the 40%. That makes sense, but I don't know what is an "expense" vs. "included" might be. I've never been party to a split deal. All the license deals I have are $X per unit since I'm not smart enought to keep up with the minute details that add up in a hurry when reviewing legal bills...$0.10 for a copy, $10 for a FedEx package, two hours of phone service, ect...
Hmmm...it does remind me of an old saying about expense reports..."the boots are there, you find 'em."
John