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Zen and the Art of Legal Pricing: Summary

2011 July 5
by John Wallbillich

Here is the complete list of 7 Rules that followed the original post in this series about Zen and the Art of Legal Pricing. I’ve provided a capsule summary of each for those who are value-billing and want the quickest bang for the buck.

The essence of the introduction to this series: legal pricing is still very much an art, and some of the efforts to make it a science have to be looked at very closely. Hence the 7 Rules. And here they are:

Rule 1: Legal Fees are like Hazardous Waste. In-house counsel are taking steps to minimize the need for legal services.

Rule 2: The Premium Pricing Fallacy. High hourly rates by themselves do not justify a premium.

Rule 3: The Transparency Reality. Increasing data about outside lawyers, costs and results will drive change by in-house counsel.

Rule 4: The Burden of Continuity. Matters that recur should not be priced at a premium.

Rule 5: The Value Pricing Mirage. Value is a worthy goal, but not an end in itself.

Rule 6: Two Cheers for Hourly Billing. Hourly billing done right works fine.

Rule 7: In-House Counsel Are Expensive, Too. The wave of change driven by legal cost control has hit the in-house beach.

I started this series by borrowing from the title of Robert M. Pirsig’s amazing book. The subtitle of that work is “an inquiry into values,” and this series was, in part, and inquiry into value, as in pricing.

Anyone who has read that book knows what a shattering journey Mr. Pirsig took, and how it would have been easy to be pessimistic afterwards. Without stretching the link to that book and these posts any further, I want to be clear about one thing. This legal change and cost control stuff is not easy. It affects good firms and great people, sometimes unfairly. Many lawyers I know feel genuinely adrift, like the profession they once loved is not the same and may never be again.

I remain an optimist. Anyone who reads through these 7 Rules should see opportunity all around. Identifying those opportunities and pursuing them is another matter, however. Most law firms will not change. They will be changed, nevertheless, make no mistake about it. It will be by partners leaving and clients not returning. Change never sleeps.

For those who are aware and nimble, though, it looks like open road ahead. As Mr. Pirsig ended his book, I will end this series:

Trials never end, of course. Unhappiness and misfortune are bound to occur as long as people live, but there is a feeling now, that was not here before, and is not just on the surface of things, but penetrates all the way through: We’ve won it. It’s going to get better now. You can sort of tell these things.

Change ahead, prices falling...

2 Responses Post a comment
  1. Barbara Lander permalink
    July 6, 2011

    I’ve been an in-house attorney for 20 of the 23 years of my practice and I think the best way to control legal costs is to avoid legal problems. That means to control your clients’ behaviors. Have policies in place, communicate them to your clients and make sure the top executives give your department enough respect and enough “juice” that the consequences for violating these policies are severe. I know you get a lot of “They’re all playing in traffic; why can’t I?” in house. And sometimes you have to say the equivalent of, “Because I said so.” (Don’t you love it when your legal skills and your parenting skills converge?) But your job isn’t to be popular. Your job is to protect the company.

  2. John Wallbillich permalink*
    July 7, 2011

    Barbara:

    Certainly avoidance and preventative law are great long-term strategies. You also are spot-on by identifying some of the key attributes that separate great from merely good legal departments.

    ~ John

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