Corporate & Securities Law

Legal Cost Transparency Sets Pricing Expectations

By John Wallbillich

The most powerful trend in legal cost control is client knowledge as to how discrete services are priced and what certain results cost.

This is because until someone knows what is possible, you can’t go to the next step and make it probable.

Last week I profiled a contract lawyer example. It wasn’t just a discount, it was the same lawyer, 60% off.

Here is another example, this time about offshore legal services in India, involving a leading legal process outsourcer and a well-trained lawyer, Gaurav Sood:

But CPA Global typically charges an eighth of what a British or American lawyer with similar experience and expertise might cost. So as law firms and in-house legal departments face growing pressure to cut costs following the global economic downturn, an increasing number are looking east to qualified professionals such as Mr. Sood.

I had to read that twice. One-eighth. As in over 80% less.

It’s true that when asked, many GCs still say they prefer “good results” over “lower prices.” But it’s a trick question, since for an increasing amount of legal work, GCs can have both.

And once this legal cost transparency shows up on the CFO radar or gets populated into the CEO dashboard, the law game changes forever.

From that point onward, no GC in her right mind would bring a large-scale AFA into the boardroom for approval that doesn’t provide significant double-digit savings.

I’ll let that sink in and on Wednesday describe what I think this new reality means for many law firms.

Full post as published by The Wired GC on January 24, 2011 (boomark / email).