Efficiency and Alternative Arrangements Are Gaining in Favor.
In the October 2010 edition of U.S. News & World Report, the magazine ranks the “best” U.S. law firms (whether big or small), based on certain categories of specializations. That alone is interesting reading. However, the article also has some interesting observations on the trends, short-term and long-term, on how attorneys are (or should be) structuring arrangements with clients.
Pfizer Inc., for example, employs a “bucket” concept by which a group of 18 law firms gets the company’s work in “buckets.” The firms are paid flat yearly fees and strive for incentives such as bonuses and additional work, if they add value and collaborate. This concept was inspired by the disadvantages of paying based on the billable hour, which can spark inefficient relationships between lawyers and their corporate clients–according to quotes by Pfizer’s in-house counsel.
More than anecdotal observations seem to be seizing the day. According to LexisNexus’ late 2009 “State of the Legal Industry” Report, pricing and fee structures were rated the most pressing issue facing the industry by 71% of surveyed corporate counsel and 60% of surveyed private practice attorneys.
So, what does all this mean for the future? The magazine has a discussion with legal scholar William Henderson of the Indiana University-Bloomington Maurer School of Law, who was bluntly asked “what model will work going forward?” His answer goes like this: “The next generation of lawyers are going to have to have different work processes, a teamwork approach, and ways to make sure the client’s getting the benefit of knowledge management efficiencies. That’s the future. That’s what happens in every other industry.”