Legal Research

"Alternative Fee Strategies (Part 3 of 3): Transparency and Shadow Billing"

This post was written by Jim Hassett: "This three-part series is reproduced from the LegalBizDev Survey of Alternative Fees, a research report based on in-depth interviews with chairmen, senior partners and C-level executives at 37 of the largest law firms in the US.

One of the most fundamental issues that separates aggressive firms from more conservative ones is their attitude toward transparency, and especially towards "shadow billing," in which law firms provide information about actual hourly costs on fixed price projects.  They believe that this openness and transparency will serve as the basis of a partnership.  If both parties see where things really stand, they can renegotiate in good faith if costs are either far higher or far lower than what both parties expected.

Meanwhile, more conservative firms think that shadow billing is inappropriate.  A fixed price deal is a fixed price deal, and the client should not get to look behind the curtain to see whether the firm has won or lost..."

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Source: Legal Business Development, 20 October 2010, reproduced with permission of the author.

Full post as published by Stark County Law Library Blawg on October 20, 2010 (boomark / email).