Value Based Fees

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One aspect of the Integrative Law Movement that may appeal across the board – because it doesn’t involve the oh so scary introspection that the self-developmental aspects of Integrative Law do – is that of Value Based Fees. 

I am a huge advocate of vision-led and values-driven organisations, which include law firms and one of the values I believe every organisation should hold, whether explicitly stated or not, is that of FAIR EXCHANGE. In other words, we’ll provide a service and you pay us fairly for it.

It goes without saying that one of the biggest causes of the public’s disillusion with the legal profession is the issue of hourly billing. Clients hate getting large bills they had not anticipated. The pros and cons of hourly vs value based fees require a lengthy discussion which this post is not the place for – I simply want to make the point that globally, market pressures are forcing law firms to reconsider hourly billing and forcing in-house counsel to find ways to lower the costs of managing corporations’ legal affairs.

I’ve come across some great work by the ACC – the Association of Corporate Counsel in the US.  The ACC has developed a “challenge” which has nominations from companies across the US who submit their methods of alternative legal spending.

So what is the ACC Value Challenge?

The ACC Value Challenge is an initiative to reconnect the value and the cost of legal services. Believing that solutions must come from dialogue and a mutual willingness to change, the ACC Value Challenge is based on the concept that law departments can use management practices that enhance the value of legal service spending; and that law firms can reduce their costs to corporate clients and still maintain strong profitability. The ACC Value Challenge promotes the adoption of management practices that allow all participants to achieve their key objectives.

“The ACC Value Champions are managing the heck out of legal spending — analyzing cost drivers, converging law firms, in-sourcing, targeting key goals, resourcing flexibly — in short, re-engineering the legal function. And the cool thing is, rather than becoming factory-like shops (as these B-school-ish terms may connote), the champs, both inside and outside the corporations, are clearly enjoying a more satisfying way to practice law.”Catherine J. Moynihan is Director of Legal Management Services at ACC, where she helps inside and outside counsel advance skills in managing the legal function. @CathJMoyn

You can read about a company that “Leverages Technology, Social Media Tools and Smart Pricing to Get More Bang for the Buck”. There are firms doing clever things with the way they manage contracts, store information, recruit young hires, train new lawyers, use social media – and tons more!

If you are a lawyer in this day and age you HAVE to get smart about alternative to hourly billing if you want to keep up with the economic shift.

Have a look here for some of the things the 2013 ACC Value Champions are doing.

And the coolest thing about all this valuable insight ACC has on value-based billing, is that they have compiled it into nifty booklets that you can read (and maybe download, haven’t figured this out yet) for FREE!

For the ACC Digital Download centre you can click here.

If you agree that we could benefit from some of the ACC’s insight in SA and that a 1 day conference on this in Johannesburg and Cape Town would be welcomed by SA attorneys, please let me know. I’d love to work on getting the ACC here. (And discovered in my missioning that Catherine who I quote above, from the ACC, was born in Port Elizabeth!)

Best wishes for happy discovery around value based fees and happier clients,

Amanda Boardman

*the image is of a rooster called Being who I met in Bali. I learned there that roosters are alternative sources of income for many Balinese. My friend Wayan runs a spa and tour-guiding business but is not averse to borrowing Being from his friend up the road for some cock-fighting from time to time to boost his income. (I did not watch any cockfighting  – I have issues with animal cruelty yet my objections  get tangled with my need to respect other cultures  – I just stayed away from the fights.) Alternative income – yes. Value-based? Well, it depends on your values.