Yesterday’s PSF Journal contained a Colin Jasper and Libby Maynard article with a very interesting analysis of the pricing dilemma for lawyers and law firms. After reading their article, you’re likely to recognize one unfortunate reality — lawyers do not think in terms of understanding the cost of a unit of production. Without that understanding, reliance on the hybrid pricing models the authors suggest still creates situations where too much of the pricing risk inappropriately rests with the outside lawyer.
There is a solution, however. Lawyers can introduce a collaborative pricing process that eliminates almost all of the risk for both sides. In a nutshell, the lawyer works with the client to:
- Identify the logical components of recurring projects (e.g. deposition, discovery, opponent’s financial position, etc.).
- Create a fee spectrum using these components, with the smoothest, most seamless case or transaction at one end, and the worst nightmare case or transaction ever on the opposite end.
- Peg this case or transaction along that spectrum – today.
- Agree to adjust the cost incrementally, up or down, when components of the project slide from the current position on the spectrum towards either end (e.g. five days of depositions turns into ten days)
This approach is easy to learn, but it’s also very subtle. There’s a precise order to the questioning process that guarantees successful collaboration. Lawyers (and their clients) who use it properly describe this process as a “career-lifesaver.”
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