What Are Value-Based Legal Services?

Value-based legal services are just that – the client pays a fair value for the services received from their lawyer. A few recent articles discuss these types of fee arrangements but most of them simply describe alternatives to hourly rates with little explanation of how these may benefit you as a client. None that I have found provide actual insight into why lower law firm hourly rates ultimately cost you more.

My real-life experience both as a lawyer and as a litigation manager has proven that the value obtained from a law firm is based on many factors, the most important of which are firm’s efficiency and overall results. While measuring overall results largely depends on the client’s perspective, efficiency can be objectively measured in today’s electronic world. Institutional clients such as insurers can easily track the length of time a case is open and, of course, the total legal bill not just by the law firm but by an individual lawyer. However, limited insights can be gained from this analysis when the company follows its historical precedent of limiting the range of rates it is willing to pay lawyers.

I started in insurance claims in the early 1980s in Connecticut. If I had a claim that did not settle, I hired a law firm within a geographical area from a list of 2, maybe 3 choices. I did not know why these firms were chosen as panel counsel, but none were efficient because all court filings were in paper form and communications were largely by mail. There was virtually no good way to assess the firm’s true value to me as a client.

After graduating law school and becoming a lawyer, I remained in the claims business, ultimately running the company’s litigation department. We had lawyers in 38 states. Probably over 200 law firms. All sending us paper invoices. Over 15 years had passed since I started in claims and there was still no way to assess a law firm’s true value. When I would ask one of my litigation reps why they thought certain lawyers or law firms were on the panel, the response was often that the lawyer was well-liked but there were no objective criteria. During one such discussion, I was told that the lit rep had negotiated a very favorable rate with the firm. When I asked what their average total legal bills were compared to other panel firms in the same location, I received a blank stare. Well, each of us learned something that day – he learned that there should actually be a way to determine value and I learned that the industry was not paying attention.

Fast forward to today, with coded billing and hourly rates measured in tenths of an hour. How do you measure value – your “bang for the buck”? Quite simply by taking the “SLG Challenge”. There are three simple steps and here they are:


Select a legal service that routinely occurs in your business environment


Determine what is fair compensation for that service


FORGET ABOUT AN HOURLY RATE STRUCTURE – Simply offer fair compensation for that service

In the defense litigation arena, a simple example is drafting an answer to a complaint. Let’s say it takes an associate 2 hours on average to draft a well-plead answer and defenses at the bargained for rate is $175/hour. The cost for that service is $350. If you are comfortable with that cost, does it matter what rate you are charged?  It shouldn’t. If SLG can do it for less, wouldn’t you pay that fair price for the service, even if it seems to be at a higher hourly rate? SLG offers clients the opportunity to structure fee agreements designed for their individual needs.  Under these fee agreements, both SLG and the client profit from the firm’s efficiency.

Whether you desire an hourly rate, a fixed fee arrangement, a fee schedule, or one of the many other alternative fee agreements that we offer, SLG will fill your individualized needs. In providing value-based legal services I am 100% certain that clients may be surprised at our rate structures and equally certain that when your case is concluded, you will be pleased both with our legal services and with our charges.

Take the SLG challenge today!

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