Voice of the Global In-House Bar

It’s a Buyers’ Market – Let’s Treat It That Way In The Courts

ACC filed an amicus letter with a federal court in Manhattan on Friday, March 15th, joining a protest against the plaintiffs’ lawyers larding on profit to fees for temp lawyers (also known as contract lawyers).  Just as in a real estate market with an excess of houses for sale, buyers wouldn’t pay more than the “asking price;” no paying client would ever accept marked up fees when there’s a glut of qualified lawyers for hire.  It’s a great opportunity to communicate to the judiciary what we have been pointing out since launching the ACC Value Challenge in 2008 – that there’s a better way.  Legal fees can be set much the same way they are in other professions, balancing the true cost of service delivery and value to the client.

And though the balance of power has shifted to in-house counsel, the movement to value-based relationships between inside and outside counsel has been a collaborative one. Those honored as ACC Value Champions include outside counsel who have worked with their clients to reduce spending, improve predictability and achieve better legal outcomes – very often through value-focused approaches to fees and staffing matters.   And law firms as well as law departments contribute practical resources on ways to improve value in legal spending to the ACC Value Challenge resource library, which is accessible by all seeking guidance and sample tactics (ACC membership is not required).  And several times a year, law firm and law department executives come together for workshops to build their “value muscles” through business school style case exercises applying value-based fees as well as project and process management tools to learn how to work together more efficiently and effectively.  Put simply, the idea is to make sure that clients get the predictability they need, and plenty of added-value input from their outside counsel, while law firms still achieve a healthy profit – the proverbial “win-win.”

When the over-supply in the legal market has subsided, value-based fees will not cede the considerable ground gained relative to the use of hourly-based fees.  Why?  Because clients want to buy high quality legal services at a fair price, not hours (and certainly not hours at rates that are marked up by orders of magnitude).  And because suppliers of legal counsel prefer to be trusted advisors who are consulted early and often, not as seldom as possible because it would start the hourly clock ticking.  It’s a more satisfying way of practicing law.

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