This case study shows how three different law firms can offer simpler work intake and allocation protocols, and move away from hourly billing in order to secure predictable pricing that is effective for multi-year portfolios of legal work. The prerequisite is a well-drafted RFP based on solid data analytics. The scope of work should set hour work volumes and complexity levels for each legal specialty.

Paying law firms for results is possible. Three criteria and weightings demonstrate in a case study how to link legal fees to law firm performance. The law firm agreed that 15% of $825,000 in legal fees would be tied to performance. The criteria are results for 70% of the performance fee, efficiency for 20% of the fee, and the final 10% for service. Scoring is based on 20 points – with a maximum of 14 points for results, and so on. A minimum of 16 points (80%) is required to qualify for a performance fee.

Paying law firms for results is possible. Three criteria and weightings demonstrate in a case study how to link legal fees to law firm performance. The law firm agreed that 15% of $825,000 in legal fees would be tied to performance. The criteria are results for 70% of the performance fee, efficiency for 20% of the fee, and the final 10% for service. Scoring is based on 20 points – with a maximum of 14 points for results, and so on. A minimum of 16 points (80%) is required to qualify for a performance fee.

With an hourly billing model, a company can take its time to phase out legacy firms as part of its convergence program. Fixed and hybrid fee arrangements require other approaches to manage law firm transitions. The first approach is to carve out some on-going files for legacy firms and reduce the fixed fee accordingly. The second is to have the successful primary firm oversee, pay and phase out the work of the legacy firms as part of its fixed fee. This second approach contains costs and greatly reduces the amount of administrative time that law departments would otherwise invest.

With an hourly billing model, a company can take its time to phase out legacy firms as part of its convergence program. Fixed and hybrid fee arrangements require other approaches to manage law firm transitions. The first approach is to carve out some on-going files for legacy firms and reduce the fixed fee accordingly. The second is to have the successful primary firm oversee, pay and phase out the work of the legacy firms as part of its fixed fee. This second approach contains costs and greatly reduces the amount of administrative time that law departments would otherwise invest.