Reversing the Wal-Mart Approach: Rollback Pricing Does Not Always Equal Value

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As the economy continues to ebb and flow, law firms, legal vendors, and corporate counsel alike agree that law is as much a business as it is a practice. The recent past has highlighted a general consensus that money must be saved and the legal industry’s shift towards value-based billing.

Alternative fee arrangements (AFAs), a major component of value-based billing, are part of the vast majority of law firms’ arsenal - 96 percent of firms report that 1 percent or more of their billings come from alternative fees - but that does not mean parties to AFAs are only focused on dollars and cents. Most agree that AFAs are about more than just saving money – AFAs promote communication and relationship development between a firm and its corporate client, encouraging the parties to collaborate and find the most efficient and effective way to handle a matter.

Although the drive to save money remains strong, industry leaders have started reflecting on how costs may be reduced long-term without sacrificing quality. The fact that the legal industry as a whole is searching beyond a “quick fix” indicates support for the belief that cost reductions are not always the best or only way to obtain value from an engagement.

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Published In: Business Organization Updates, Firm Marketing Updates, Professional Practice Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sarah Lovequist, Litigation Management, Inc. | Attorney Advertising

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