Analytical tools to help customize legal fees for clients

A development in the future, according to Law Tech. News, Feb. 2008, at 30, will be "business intelligence … used to develop pricing and alternative fees” (See my posts of Jan. 25, 2007: business intelligence and data mining; May 17, 2006: a definition of it; and March 23, 2006: compared to knowledge management software.). The consultant who makes this prediction, Larry Bodine, cites as an example Bryan Cave, which has used software from Redwood Analytics to customize its fees and help clients better understand what they get for their money.

The particular instance he cited was a real estate lawyer who used software’s modeling tools for pricing and staffing, as well as historical data of the firm, to see if Bryan Cave could charge real estate clients based on the square footage of their projects. "He found that while there was risk of under-pricing [the fees charged for work on] large buildings, the deal volume in small buildings offset the risk, making per-square-foot pricing possible.” This is a bellwether for how law firms can creatively and effectively price their services.