The role of legal pricing in the legal industry has grown in importance and value as internal targets and overheads compete with the need to be innovative and competitive for clients.
Conventional pricing structures are taking a backseat as Clients who want the very best in legal expertise at the most competitive price, also want the opportunity to share the risks, exposure and spoils of litigation. Lawyers who are either unable to or unwilling to provide alternative funding methods may be overlooked in favour of those who can.
All funding models have advantages and disadvantages and as costs management and legal pricing specialists we work with our client to determine the most advantageous for any given cause or situation.
The billable hour can provide some certainty to both the lawyer and client but it can reward inefficiency and fail to properly remunerate expertise.
Conditional Fees allow parties to share the costs risk but can present a conflict of interest. Fixed costs and bundling provide absolutely certainty but can encourage inappropriate staffing and can encourage corner cutting.
Other funding options, including Third Party Funding and Damage Based Agreements, may allow cases to be conducted at no or no significant cost to the client. However the resulting deductions from damages can be a cause for resentment when the case concludes. Equally where the rewards of litigation are less than anticipated, depressed deductions could mean significant losses to the funder or lawyer.
We have been providing Costs Management and Legal Pricing expertise to the legal profession and its clients for more than 15 years. We are of the view that effective legal pricing is only possible when one evaluates the key components of the retainer including costs, risk, costs benefit and profit. We work with our clients to present every possible relevant scenario to allow a balanced conclusion to be reached of what is the best solution for both the legal team and client.
Please do not hesitate to contact our managing director to discuss.