Newsflash! Big Firm (Saul Ewing) Meets Client Demand, Offers Fixed-Fees
Moving beyond all the talk of alternative fee arrangements, Saul Ewing has put its fixed-fee programs in writing -- on its Web site at least.
The firm launched this week its "cost certainty commitment" with two different programs in which either a fixed fee or a cost per-attorney, per-day will be used on specific types of matters the firm identified as lending themselves to such arrangements. ...
To start, Saul Ewing is offering a fixed, daily blended rate per attorney for due diligence work for investors, companies looking for capital and venture capital or private equity firms looking to have their portfolios evaluated.
The second program offers a fixed fee for representation at administrative hearings before the Pennsylvania Insurance Department. There are two packages under this plan, with the second having a higher cost to include some post-hearing work.
Antzis said the arrangements could be offered for certain types of labor and employment, intellectual property and litigation matters as well. ...
Law firms have been offering fixed fees for things like patent filings and the drafting of wills for years, Antzis said. But the firm's first significant foray beyond those areas came this year before the "cost containment commitment" had even been thought up.
Saul Ewing stole away work for a large grocery chain from a larger, national firm. Antzis said the chain brought its business to Saul Ewing because the firm agreed to a fixed cost for handling all of the chain's single-plaintiff employment discrimination claims in the region.
In other industries, they call this "meeting customer demand."
It has long been ridiculous to bill by the tenth of the hour for representation across hundreds of substantially similar matters which all follow the same procedures and all apply roughly the same law, like insurance regulator hearings. Large corporate law firms have inexplicably been able to resist billing and pricing reform for decades, but no longer, as revealed by that last quoted paragraph above.
Modern mid-size and large businesses are kept profitable in part by compartmentalizing costs and making them consistent over time. Just like how few businesses these days accept the risk of self-insurance or vertical integration, fewer and fewer will tolerate endless swings in legal costs they barely understand and can barely audit for performance.
The challenge for firms, then, is no longer figuring out the precise amount by which they can increase their hourly rate each year without driving off the client, but rather figuring out how to meet their clients' demand for bills that are regular and predictable.
I don't really see this as any sort of radical departure. One of the fees is "day-based". It's still time driven.
I like flat fees personally, but they are not easy to implement and involve risk and unpredictability.
I agree in part; it's not a huge departure, but it is a sizable crack in the dam. Large corporate firms with established ties to businesses have been able to do bread-and-butter work on an hourly basis for decades, despite extraordinary volume, like these insurance hearings and ordinary due diligence.
The big departure here is the scale of this new relationship and, more importantly, the fact that Saul Ewing is willing to admit to it publicly, in spite of perpetual partner fees that it will lead to clients cramming their rates down.
It may. But that's the reality of the marketplace now, and Saul Ewing is smart to react rather than do fake "performance-related" stealth layoffs.