Pricing transparency a major issue for in-house teams
As in-house teams come under pressure to cut their external legal spend, pricing certainty is more important than ever, the founder of Lawcadia has said.
Lack of visibility over future legal spend is a real issue for companies, Warwick Walsh, CEO and founder at Lawcadia, told Lawyers Weekly.
“In-house counsel now want much more transparency over the legal procurement process and need better reporting over legal spend,” said Mr Walsh.
He added that while law firms are offering ‘discounts’ to respond to client needs, firms often make up the balance by charging ‘out-of-scope’ fees.
“Legal bills are very rarely what companies expect them to be, even if they fix or cap fees,” he said.
Lawcadia is a newly launched tech start-up based in Brisbane that aims to address this issue by providing procurement and financial reporting tools for in-house teams.
“[Lawcadia] ensures accountability for prices that law firms quote and the services that law firms provide,” said Mr Walsh.
Unlike other web-based businesses that connect individual consumers and small businesses to lawyers, Lawcadia is solely focused on sophisticated users of legal services, primarily companies with in-house legal counsel, according to Mr Walsh.
“We are selective of the types of law firms who can apply to respond to new matters,” he said.
Companies can log into Lawcadia’s online platform, submit a matter brief and then access competitive pitches and proposals from a variety of firms.
The website provides a two-stage procurement process that allows companies to connect to the law firms on a matter-by-matter basis, then select up to four to proceed to the request for proposal stage.
“These firms then provide a detailed proposal, including pricing information, before selecting the law firm to engage,” said Mr Walsh.
“Law firms are then held accountable for [their] prices through our financial reporting tool and our rating system.”
This approach benefits the in-house teams because it reflects that legal fees are highly variable while enabling them to budget and justify legal spend internally, said Mr Walsh.
“Pricing transparency gives control back to the company,” he said.