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‘The hourly charge is old and should be dead by now’

In-house counsel must arm themselves with data to push for more creative pricing models from external legal panels, according to a legal services provider.

user iconMalavika Santhebennur 11 April 2023 Corporate Counsel
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TransPerfect Legal Solutions director Tom Balmer said ahead of the Corporate Counsel Summit 2023 that it is time to discard older time-based fee models where external legal firms charge organisations by the hour for their services.

“The hourly charge is old and should be dead by now, but it’s still around,” he mused to Lawyers Weekly.

“I think looking for more creative pricing models is an incredibly important thing.”


Mr Balmer made the comments ahead of the Corporate Counsel Summit in May, where he and a panel of speakers will unpack how in-house counsel could choose the right external legal panel for their organisation.

They will also provide strategies to advocate for a transition from time-based fees to more innovative and sustainable models.

Data is the golden egg

Any push for more innovative pricing models must be supported by data, Mr Balmer insisted.

This requires a thorough understanding of the types, volume, size, and cost of matters, how long they last, what types of parties would be involved in the case, and what tasks are automatable, he added.

In-house counsel must liaise with the IT, legal, and legal operations teams to collect data around high-value versus low-value work, and fixed fees versus billable hours, Mr Balmer said.

“In-house counsel should absolutely be asking legal firms for creative pricing, but if they don’t have the data and they’re just picking this out of the air, it’s extremely hard to put something together that works for both sides,” he argued.

“The data makes it easier to negotiate fee models, whether that is fixed fees, phases of fixed fees, value-based pricing models, or something else entirely. There’s no such thing as too much data if you know how to use it.”

Organisations have direct access to large and diverse data repositories, as well as data held by their professional services providers.

“Once that data is collated, you can work with those within the organisation who already specialise in collating, analysing, and presenting data to help draw insights,” he said.

Understanding and documenting the goals, current delivery process, and pain points are also necessary in order for the organisation to identify and fix issues, and fill any gaps.

This would inform the next steps, according to Mr Balmer.

“This is a much better approach to begin with than just going in with a big document and asking questions,” he said.

“It allows you to target everything you do, and you’re giving law firms a much better chance of coming to you with something valuable, and something which could solve those problems.”

If it’s not broken, don’t fix it

Gathering data could also facilitate an effective tender process to choose the panel, Mr Balmer said.

Determining the size of their external law firms would depend on the organisation’s requirements.

They could appoint a large firm for significant litigation matters and smaller ones for more bespoke matters, he suggested.

Finally, a good place for in-house counsel to begin is approaching law firms that have already been performing well, which Mr Balmer highlighted is difficult to do through a tender process.

He concluded: “If you already have them, lock them in, and ensure you push them for more — horizon scanning, knowledge management, precedents, tech, etc.

“Some companies will need to undertake their due diligence, but if it’s not broken, don’t fix it. Just improve it.”

To hear more from Tom Balmer about how you can strike the right balance with your legal panel, run an effective tender process, and determine how many law firms to appoint, come along to the Corporate Counsel Summit 2023.

It will be held on Thursday, 25 May, at Sofitel Sydney Wentworth.

Click here to buy tickets and don’t miss out!

For more information, including agenda and speakers, click here.

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