Ed Poll, writing on his blog, Law Biz Blog, parts ways with me about value based billings (See my post of Nov. 11, 2007 on how hard it is to set a value on many legal services.): “Rees Morrison observed, “Certainly no law firm can hazard more than a guess on the worth to a particular client at a particular time of its 10 paralegal hours, 20 associate hours, and 8 partner hours on a revision of a major sublease. For much that law firms do, value and cost are incommensurable.”
I agree with Rees when one looks backwards. However, if one reviews the matter with the client before the engagement actually begins, the client generally will be able to assess the value to him/her/it. At that point, the law firm and client, together, should evaluate whether the anticipated service can be delivered for a fee that is commensurate with the value delivered as perceived by the client.” I agree with Ed that clients are better positioned to value a legal service, but that doesn’t mean that they can put a dollar value on the service.
Poll adds: “Budgeting for the matter, with the involvement and concurrence of the client, will go a long way to establish both the value to the client and likely fees the law firm will charge.” Budgets are often based on what firms charged previously for similar work, not on a calculation of the value of the work to the client.