What is a Fair Legal Fee?
An absolute must read for both clients – and attorneys – is Validatum’s “‘Value Pricing’- Capitalist Acts Between Consenting Adults“.
The author, Richard Burcher, posits that it is not the fee structure, or even the amount of the fee, that determines pricing fairness:
“Modern legal services pricing should be about the optimal alignment of the fee and the clients’ perception that they have received fair value and the lawyers’ perception that they have been paid properly (which, to state the obvious, has absolutely nothing to do with arbitrary and homogenous hourly rates).”
Thus, a “fair fee” must balance two “apparently diametrically opposed outcomes” – both the client believing they have received good value and the lawyer believing they have been fairly compensated for the amount of effort expended and outcome achieved. Not an easy task to accomplish, but one that must be accomplished to have a successful attorney-client relationship.
Mr. Burcher then outlines the specific characteristics that are generally present in negotiating a “fair fee”:
- The fee is the result of a collaborative and ‘upfront’ conversation with the client
- The fee is the result of the client, not the lawyer choosing the most appropriate pricing methodology for their circumstances, but one that nevertheless ‘works’ for the lawyer
- The client has been closely involved with scoping the job from the outset
- The selected pricing methodology addresses the clients unique value drivers (which can change from job to job even with the same client)
- There is an attempt to achieve a measure of alignment between the result and the fee and not just the effort and the fee
- The fee strategy reflects a demonstrable alignment of both the lawyers’ and the clients’ interests
- Just as importantly as all the foregoing client-centric issues, the lawyer must be fully rewarded to their satisfaction for the effort expended, the results achieved, the value delivered and the risk assumed in undertaking the work.
Not rocket science, but invaluable advice to both clients and attorneys who desire great outcomes.