An interesting article ran in Lawyers Weekly, May 7, 2010, by [star] reporter Angela Priestley: “Blasting Billable Units in the Top-Tier.”
Australian firm Freehills’ managing partner, Mark Rigotti, discusses his views on “alternative pricing strategies.”
But he’s not so sure the demands from clients are as intense as people think. Here’s an intriguing line:
Like all trends, it might be a little over-baked at the moment. I say that both from the client and law firm’s perspective. Hourly rates still feel like old slippers, they might be a little worn and a little ragged to look at, but they are still something that are comfortable.
This is similar to what King George III wrote in his diary on July 4, 1776:
Nothing of importance happened today.
Yet the firm has formed a pricing committee, while Rigotti admits:
Freehills needs to be at the vanguard on it and needs to be understanding and participating in it—instead of just waiting for it to happen.
One is left wondering why you’d want to be in the vanguard of an “over-baked” trend?
He cites an example of a client who refused an alternative pricing structure and stuck with the billable hour.
Sure, if you give them an option. But law firms—especially those in the top-tier—are going to have to learn that sellers change pricing strategies, not buyers.
If the only way to become a customer of Freehills is to accept its pricing strategies, then client’s reluctance will wane very fast.
Do you see sports fan revolting at teams adopting “dynamic pricing”—that is, charging different prices for different games, times, etc.?
At least Rigotti understands the big issue:
The debate about alternative billing is not about discounts, it’s about value. It’s not a threat, it’s an opportunity for both clients and for law firms.
If that’s true—and it is—then why say one thing and continue to do another?
Why the reluctance to throw away those ratty old slippers, Mr. Rigotti?