But not knowing what services might cost at the beginning of an engagement does clients a disservice, and can cause a lot of undue stress-leading to a poor client experience.įor law firms that strive to offer client-centered service, unbalanced law firm pricing risk can be the factor that makes clients turn to another firm. Certainly I, as a client, don’t.”Īsking clients to shoulder the risk might seem easier for law firms at first. “…And so, you would think that they would have the most information about what that’s going to look like, how long it’s going to take, how much it’s going to cost. “The law firm who is representing me has resolved this issue for clients over and over again,” Ed says. When Fastcase engages the services of a lawyer, for example, Ed wants to know at the outset how much it will cost. To Ed, who was previously a lawyer himself, the ambiguity of a billable-hour structure puts the responsibility for pricing risk in the wrong hands. If the client engages the lawyer’s legal service, they’re taking on the pricing risk-because they can’t truly know how much or little the bill will be at the end. So, the client can’t estimate how much those legal services will cost, making it nearly impossible (and stressful) to budget accordingly. While the answer is certainly honest, it doesn’t provide the real information the client needs, because the client doesn’t know if the work will take one hour or a hundred hours. “It’s a $X-hourly rate, times as many hours as it takes to get it done,” the lawyer says, citing their billable-hour fee structure. They approach their lawyer, asking, “How much will this legal service cost me?” Picture this: A client is in need of legal services. Ideally, risk should be balanced according to who has the most information. For a client, pricing risk is the risk of agreeing to pay for a service without knowing the final cost. Pricing risk is the risk for a provider of setting a price without knowing exactly how much it will cost to provide a service. By shifting how we frame law firm pricing-favoring more transparent fee structures and better communication about pricing-law firms can create smoother legal services engagements that benefit their business, and their clients. As Ed explains, the billable hour puts the weight of pricing risk on clients’ shoulders. To explore the issue of pricing risk for law firms, we spoke with Ed Walters, CEO of Fastcase, at the 2019 Clio Cloud Conference.

While billable hours might be the norm, they can also mean ambiguity, confusion and pricing risk for clients when it comes to estimating the cost of legal services. For most legal services, the billable hour is still prevalent. It might seem obvious when it comes to food service, but this upfront pricing model is not the norm in the legal industry. When you order food at a restaurant, you don’t expect to know exactly what ingredients and techniques go into making your meal-but you do expect to know about how much it will cost.

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