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January 09, 2008

Value price this. Part IV.

Value Pricing v. Billable Hour. Scroll down. It's not often that we get a total of 17 comments on any subject, it goes on for 5 days, and all of the comments are informed and sane. How do we ensure that clients--from GCs to small businesses and individuals of more limited means--get value? The last comment, from trial lawyer John Day, who arguably speaks for billable hour Tories*, old schoolers and other high-functioning dinosaurs like WAC?, is likely not the last word:

I had lunch with an assistant general counsel of a publicly traded company today and discussed this controversy. His thoughts: "We do value billing on every matter where we employ counsel. We pay them by the hour, but if we don't think we get fair value for what we paid, we don't use that lawyer again."


*WAC? is part Irish (and yet generally factual). "Tories", interestingly, was first used to describe rural bandits in Ireland. And then, of course, it changed.

Posted by JD Hull at January 9, 2008 11:59 PM


In the UK for Legal Aid (publicly funded) matters, the paymaster - the Legal Services Commission - is seeking to impose its own version of value billing, initially fixed fees, followed by competitive contract bidding for a fixed price for X number of matters. This is for Civil and, I think, Criminal matters. This is an attempt to enforce a levelling out of immensely variable case costs (from a few hundred to tens of thousands of pounds, or more if appeals are involved) to a level that the LSC admit is below current average billing by the firms currently engaged. As the rates are already less than half private hourly rates - and will have to get lower - the idea that there will be competition for these 'lowest bidder' contracts is ridiculous.

I don't have any particular brief for or against value billing in certain areas - but this is an example of the kind of pseudo-market thinking that can occur around flat-fee contracts where the commissioner dominates. 'Value' in the specific case is not paid any attention, beyond a base 'quality assurance' level.

Posted by: Nearly Legal at January 10, 2008 01:12 PM

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