A firm that distributes the savings when a lawyer comes in under budget – yet a doubt

A Washington, DC virtual firm called Clearspire has 20 or so lawyers and an unorthodox business model. The Economist, Aug. 13, 2011 at 64, says that its lawyers offer cost estimates for each phase of their work. If the lawyer exceeds the estimate, too bad for the Clearspire lawyer. “But if a lawyer finishes his work faster than promised, he gets a third of the savings. The client also gets a third, as does Clearspire.”

If I understand this correctly, only of the client negotiates a competitive and reasonably accurate estimate (budget) does “This give[s] everyone a stake in making the process more efficient and predictable.” Otherwise, if the lawyer estimates $60,000 and comes in at $51,000, why is the client better off “saving” $3,000 when the lawyer gets the same amount and Clearspire does. The temptation at Clearspire to inflate the estimate would be irresistible. In fact, the inside lawyer might conspire in the same direction so that she can claim a “savings.”

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