Our clients define value and success in ways that best serve their unique business needs and objectives. We work proactively with them to understand their needs and to develop pricing and fee arrangements that respond directly to their goals, expectations, and preferences for cost efficiency, predictability, transparency, and value.
We understand that our clients are under tremendous pressure to stay within their internal legal budgets and to control legal costs. They count on us to develop reliable cost estimates. It's our job do our homework. We work with clients to define the scope of each matter—what is included and, more important, what is not—to identify variables that might affect cost and to develop reasonable assumptions about those variables in the planning process. This helps us prepare detailed budgets and work plans for each engagement that give the client a clear and reliable picture of the legal spend. We use these tools to keep our clients informed about any deviations from the plan so that there are no surprises.
We believe that the discipline involved in creating budgets and work plans is so important that we encourage our lawyers to prepare them even when clients do not require it. We prepare budgets as a part of our matter intake process. We monitor progress against budgets using Ballard Budget Manager, a dashboard tool that provides real-time budget-to-actual information and helps us to better manage each matter. The tool also helps us anticipate potential issues and discuss them with clients so we can jointly agree on any necessary corrective action.
Staffing and Cost Efficiency
We assemble the right team of legal professionals—both in terms of their knowledge of the client's business and their legal experience—to staff each matter. We focus on being as efficient and cost-effective as possible and work closely with the client when preparing budgets and work plans. We discuss the intended role of in-house professionals (whether the legal department will undertake some of the work or simply oversee the matter) and the client's goals and priorities in handling or resolving the matter. We then prepare a detailed budget and work plan that articulates each team member's role and responsibilities. We revisit the plan as needed throughout the life of the matter to ensure that the right team members are handling the work, to avoid duplication of effort, and stay on task.
We understand that the foundation of any successful partnership is trust, and that trust is rooted in transparency. We have found that our clients are often very interested in discussing alternative or value-based fee arrangements (AFAs), but can be reluctant to implement them. Well-crafted AFAs can respond to client goals for efficiency, predictability, and risk sharing in ways that traditional, hourly-based arrangements do not. We believe in giving our clients a variety of fee arrangement options for a particular engagement so they can choose the one that best aligns with their goals and priorities. As the matter progresses, we provide the client with the information they need to feel comfortable that we are delivering the expected value.
We track budget-to-actual performance on a real-time basis and send reports to clients as frequently as they desire. Typically these reports show the hours and fees worked against budget by phase or by task, but they also can include time entry detail. We use Ballard Case Manager to manage tasks and deadlines. The tool also can be used to send weekly matter status reports to clients.
We recognize that each client will have preferences about the mode and timing of communication about matter status. Some clients prefer daily or weekly calls or emails. Others favor in-person meetings or want updates only if changes occur. From the outset of a matter, we develop a communication plan based on the client’s preferred method of communication and timing.
Risk and Reward Sharing
We work with each client to develop a pricing structure that is right for that client and appropriate for the matter. It is our goal to use AFAs for as many of our client matters as possible because we believe they provide the most effective way for us to demonstrate to clients that we intend to serve as their business partners and share the risk and responsibility of delivering value.
We have successfully implemented the following AFAs for many of our clients. They can be used alone or in combination:
- Blended hourly rates: The client pays a single rate per hour for all team members or for each class of team members.
- Fixed fees: A single fee for an entire engagement, portfolio of engagements, task/phase, or groups of tasks/phases.
- Flat fees: A single fee per month, year, quarter, or other discrete period of time.
- Retainer fee: A single fee for a specific number of hours of work in a given period of time such as month, year, or quarter.
- Capped fee: Hourly rates are charged up to an agreed maximum amount for a particular engagement or period of time. If additional work is required to complete the matter beyond the cap, the firm bears the cost.
- Risk/reward structured arrangements such as fixed fees with a collar, holdbacks, success fees, broken-deal fees, and other performance-based arrangements.
Our post-matter review process helps us to evaluate the success of each AFA and propose innovative pricing structures for future matters.