Each week we scan the web for one piece of content to share with the legal community for a series we call the Friday Share. We’ve posted infographics, presentations from SlideShare and this week, we’re adding a share from Scirbd: The State of Legal Pricing 2013 by Toby Brown.
Published last year, Mr. Brown states legal pricing is “absolutely chaotic” and this paper is an effort to step back and consider the issue from a “higher vantage point.” He sets that stage by pointing out three challenges with law firm pricing:
1. Variance. Service levels and pricing vary from firm to firm. “From the highly complex to the mundane, prices vary to a significant degree,” he writes.
2. Complexity. Legal work, especially litigation is complex. He notes “…a client does not buy one deposition, two filings, and a side of legal research.” There is tremendous difficulty with “standard pricing” because for example, deposing middle management requires very different preparation than deposing a C-Suite executive.
3. Standardization. In a discussion of price codes, Mr. Brown’s point is the legal industry is not standardized. “As a market we haven’t even determined standard case types at this point.”
Legal Pricing Trends Explored
At the time of this writing, the Scribd analytics indicate the paper has earned 1,000 readers, though it deserves much more (indeed it probably has more from a blog series: SOLP – Part 1; SOLP – Part 2; SOLP – Part 3; SOLP – Part 4). The document on Scribd pieces together the entire concept in an eight page paper which is a quick read, and takes readers through a compelling journey across a range of trends in legal pricing including:
- Catalyst and pressures on inside counsel
- Rise of law firm discounting
- Growing distrust of the billable hour
- AFAs and the expanded use of RFPs
- Influence of procurement on legal service acquisition
- Legal data and analytics in pricing
It’s worth noting that Mr. Brown doesn’t provide a solution – clearly the challenges are more complex than magic. Rather, he’s facilitating a pragmatic discussion in the legal industry and concludes:
While the current state of legal pricing is definitely chaotic, chaos is either a trial to be endured and overcome by individuals, or an opportunity for a community to rebuild their world as it should be. I choose to believe the latter and I hope this paper might be the first step toward understanding and eventually taming the chaos of legal pricing.
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