Rate Negotiations are a Red Herring
Corporate legal departments want to talk about rates. They want to talk about standard rates and alternative rates. Then comes the hourly rate discount discussion because a discount means better value. Rates are part of the fee for service equation (Rate x Time = Fee) but the far less important component when it comes to driving value. rate negotiations are arguably just a red herring - a seemingly plausible, though ultimately irrelevant, diversionary tactic. The conversations should focus on the work itself. More specifically, who should be doing it, and how long should it take. Time efficiency is the red flag issue.
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Trust, but Verify
What if you could trust every billed hour was a good hour?
The answer was resounding. “It would be so much easier!” They went on to explain that modern mechanisms provide some level of accountability and predictability, trusting their law firm partner was more important. When things change in a matter, and there are always twists and turns, then assumptions need to be adjusted, addendums added, scope changed, and economics modified. Most cases are just too difficult to predict.
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The Duality of Legal Spend Analytics
There is a misperception in the legal industry that there is an imbalance of economic information as between law firms and their clients. The truth of the matter is that both law firms and their clients have access to comparable data. This billing data could be using more effectively if buyers and sellers of legal services collaborated around it using modern data analytics tools. This level of transparency will make the practice of law value driven and will benefit all parties.
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