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“Pricing among law firms is not competitive when it comes to litigation services”?

In May 2006, 162 readers of InsideCounsel completed a survey which found that more than 8 out of 10 believed alternative fee arrangements are a tool to control litigation costs (See my post of Sept.17, 2006 for more on this survey by Butler Rubin.). The published comment after that datum, in InsideCounsel, Sept. 2006 at 31, goes wildly beyond: “Most survey respondents say pricing among law firms is not competitive when it comes to litigation services.” Given that alternative fees are viewed as a tool to manage costs, on what basis can one conclude anything about price competition in litigation?

A second question asked respondents whether they had ever used alternative fee arrangements. About 4 out of 10 had not ever done so. The summary that followed once again went way beyond the survey findings: “Hourly billing may still be the dominant billing model, but a growing number of corporate counsel are using alternative billing methods.” How do they know from that single data point that a growing number of in-house lawyers are doing anything? There is no trend data. And that 58 percent of respondents expect such fees will increase substantially over the next three years does not support the claim that a growing number are currently using alternative fees.