Jim Hassett Takes A Detour--But It's Worth It
Earlier, I wrote about Part I of Jim Hassett's 5-part series on alternative fees. Jim has already written the entire series (if you want it in full format, it's available here). But showing great agility, Jim has adapted Part II on his blog posts to incorporate some dialogue created by Part I. Jim shares some email exchanges with Ron Baker of VeraSage Institute, which are most interesting. The issue Jim captures is how soon alternative fees arrive as a meaningful replacement of the billable hour.
Having spent some time in discussions with Ron, I know him to be a proponent of value billing--that is, figuring out what the value of a particular matter is and having that value become the fee. At our very first meeting, I asked Ron how that would work in the litigation context and I never quite heard an answer that made sense to me. From my standpoint, it is a mistake to let the idea of "value billing" hijack the movement to alternative fees. In a perfect world, a value fee and an alternative fee should be one and the same. In the real world, an alternative fee is simply one that aligns the economic interests of lawyer and client. After that, the bells and whistles added can (and should) result in cost savings and greater value to the client.
The discussion is worth a careful read.
Hi Pat,
I don't recall that exchange, but we've written extensively on how to scope complex jobs, including litigation. Basically, you put it into phases.
In response to another blog post, I wrote this post this morning on how to value price: just do it, at:
http://www.verasage.com/index.php/community/comments/how_to_value_price_just_do_it/
This is one approach you can use for scoping litigation, compliments of Chris Marston of Exemplar Law who only Value Prices and doesn't do timesheets.
http://www.verasage.com/index.php/community/comments/how_should_professionals_scope_complex_jobs/
Hope that helps.
Regards,
Ron
Thanks for the insights Ron. I am very familiary with Chris Marston's concentric circles. I find the concepts help me figure out my costs and help with pricing, but in my experience they don't help the client figure out the value to the client of resolving the litigation. In our discussions, you spoke about the value to the client. That remains the tricky part, because assuming equal quality of service providers, the value to the client (as most clients perceive it) is the minimal necessary cost to achieve a satisfactory result. It's different if you are doing a deal for someone. And from my discussions with Chris, Exemplar is more a transactional firm than a litigation firm. So, at this point, even though the vast bulk of our work is done on an alternative fee basis, very little is "value billing" (using a client-centric definition of value).
Pat - I am now revising Parts 4 to 7 of my series, which will include a discussion of how to set prices. Do you have any advice? Were any written sources particularly helpful to you? -- Jim
