Think Tank: 25 Things Law Firms Wish They Could say to Clients but Can’taderantuser
By Chris Cartrett, Executive Vice President, Aderant
If trends were measured by the volume of headlines, alternative fees arrangements (AFAs) would seem to be the number one trend in the future of legal pricing. Don’t be deceived, data tells us the headlines don’t match reality.
An Aderant survey of business of law professionals published last August found the median number of law firm client accounts structured under alternative fees arrangements (AFAs), that is those invoiced by a model other than the billable hour, is a mere 14%.
Does that mean AFAs are a bad idea? Of course not.
There’s a good case to be made on both sides of the table for alternative pricing. The point is conventional narratives, so easily accepted, are sometimes more heavily weighted on the aspirational side of the scale.
The Conventional Narrative on Law Firms
Narratives often grow by anecdotes re-told over and over until we lose sight of the origin. There has been a narrative for the better part of 10 years that suggests law firms are slow to innovate and change-resistant.
Yet, as I argued in a contribution to Law360, that doesn’t reflect my experience with the many law firms I’ve visited for more than 20 years. I commonly find law firm leaders very attune to the market, and their methodical decision-making is sometimes mistaken for sluggishness.
Our survey demonstrated a lot has changed inside the firms in terms of structure and collaboration. They are also very focused on operational efficiency and pricing.
These changes often go unnoticed, because it doesn’t fit the conventional narrative. More importantly, the sentiment from the survey pointed to a growing frustration bubbling just under the surface.
Candid Answers to an Open-Ended Question
The survey concluded with an optional and open-ended question:
What is one thing you wish, or your firm wishes, you could say to clients but cannot?
We received 35 responses from business of law professionals. Much of the commentary centered on the challenges of the business relationship in the context of billing guidelines, e-billing, and getting invoices paid in a timely fashion.
What follows are verbatim comments from a representative sample of respondents. We’ve grouped into three sub-categories – pricing, billing and collaboration.
While we edited text for style, punctuation and length, we left the meaning untouched. It’s worth noting there were a few responses, although authentic, we deemed unpublishable.
1) “Please pay your bills on time so that we can continue to provide service at the highest degree of excellence.”
2) “We’re worth full price.”
3) “You cannot have the work done for the cost that you are willing to pay.”
4) “You are NOT the only client the firm has and we cannot place other matters on hold and move yours to the front.”
5) “Don’t say you want to ‘partner’ with me if all you want is to get the same services for less money.”
6) “Our work for you is not profitable; we can no longer work for you.”
7) “Pay faster.”
8) “Sometimes you go over budget.”
9) “We bill you as fairly and cheaply as possible!”
10) “Pay your bills.” [There were several variations of this comment].
11) “Stop lumping our specialty practice firm in with mega law firms (against whom we compete) when it comes to demanding discounts. Recognize our value as a ‘boutique’ practice and do not tar us with the same brush as some firms who have been taking advantage of corporate counsel for decades. This while your company makes billions of dollars and demands draconian discounts and rate freezes.”
12) “It appears that e-billing requirements and checks are becoming unbalanced and unfair.”
13) “Stop coming up with custom data sets and codes. Just STOP.”
14) “Please have a common task code and outside counsel guideline format; and the same audit checklist!”
15) “Before making the decision to move to an e-billing system, it is extremely wise to work with your law firm, and others required to use the software platform. Often the vendor of the e-billing solution oversells the benefits and the relative cost of adoption. Issues with set-up can create significant challenges between law firms and their clients.”
16) “Please use your e-billing vendor to data mine the information you request our firm to handle. It’s available on the bills you require us to submit via a third-party vendor.”
17) “Review the rates! Please read your retainer agreements.”
18) “Better understanding about what e-billing means.” [We interpret this comment to mean, corporate legal doesn’t understand the impact of e-billing on legal services providers].
19) “When you sign an engagement letter that says you will be paying administrative expenses separate from the attorney’s billing rate, with an explanation within the engagement letter of what those are, do not just not pay them and say ‘oh we don’t pay those’ after the fact.”
20) “Raising an associate’s billing rate due to another year of experience is a reasonable approach to pricing.”
21) “We apply advanced machine learning techniques to mine our data for operational inefficiencies and insights.”
22) “Let’s work together to let data drive our decision making.”
23) “Let’s be more collaborative on pricing – discounts don’t really help either of us.”
24) “We have to make money just like you do.”
25) “We strive to tell our clients everything – even if not good news – so that we can manage expectations.”
The Narrative of Partnering
If there’s a subtle narrative we see in these responses, and in the overall survey data, it’s that law firms have a strong desire to be strategic business partners. While there aren’t many lawyers who enjoy discussing pricing and invoices, it is a necessary two-way conversation to strengthen those relationships.
- Legal Business Report: The Partner’s Business Case for Modernizing Law Firm Billing
- Think Tank: How Law Firms Can Reboot Business Intelligence to Improve Profitability
- Corcoran’s Business of Law: Pricing Legal Work is a Two-Way Street