“The billable hour is not dead,” he said with firm determination in his voice at a law firm conference in New York a few weeks ago. “People have been burying it for the last 20 years that I have been a lawyer. It’s not going away.” He smugly looked at the mostly nodding group of colleagues around him and sat down again.
A lot has been talked and written about pricing and alternative fee arrangements (AFAs) in the past few years, not only since the Great Recession. Clients supposedly want AFAS and predictability, but in the end all they really want is a good discount—or is it? Meanwhile, many lawyers argue, at conferences and dinner parties, that the law is too particular and unforeseeable to put a price tag on. On the other end of the spectrum, firms that are built on new pricing models challenge the status quo, such as Valorem Law, Exemplar Law, Axiom, Riverview Law and others.
“AFAs are nothing innovative when seen in the broader commercial context,” says Stuart Dodds, Director, Global Pricing at Baker & McKenzie in Chicago. “Other businesses have had to address the questions previously – law firms are just coming up to speed now. Many law firms are slightly behind the curve of what it means to be efficiently run as businesses. They just didn’t have the same economic pressure.” He likes to refer to AFAs as “appropriate” fee arrangements.
Read my article Pricing as an Element of your Marketing Strategy in The Bottom Line, Official Publication of the State Bar of California Law Practice Management and Technology Section, Volume 33, No. 4 August 2012, pages 15-18 for the full article (member login required)