The relationship between in-house counsel and their law firms is multifaceted and complex; no aspect of the relationship more so than the pricing element. In a previous blog post (Attention General Counsel: Pricing Is A Team Sport, Not A Solo Event) I outlined my thoughts on aspects of this relationship that would benefit from a change in attitude on the part of some General Counsel.

In the interests of balance and fairness, what follows is the distillation of my discussions with General Counsel on their expectations of law firms:

“Help us reduce our legal costs”

I know that your reaction is that this is tantamount to asking turkeys to vote for an early Christmas. I understand that your firm needs to be profitable and like me, you are running a business. However, I know that you know that there are other ways in which your production costs can be reduced and we are interested in working with you to identify strategies to reduce your production costs.

Nor do we necessarily expect that this must be a zero-sum game. If you are prepared to undertake this in a transparent way, we are open to sharing the cost saving benefits so for every £1 of cost that can be driven out of the production process we are willing to share that saving with you. That way, we achieve some bottom line cost savings and you maintain your profitability and margins. It's not rocket science if we sit down and work it out together.

However, you should be under no illusions. We do need to reduce our total legal spend and if we can't achieve this collaboratively in a way that works for both of us, we will have to consider other options.

“Give us pricing options, choice and flexibility”

Henry Ford (referring to his model T motorcar) might have been able to get away with “you can have it in any colour you like, as long as it is black”, but when it comes to pricing of legal work, that approach does not work for us any more.

I know that there has been a lot of hot air and rhetoric in recent years around the disappearance of hourly billing and the emergence of alternative fee arrangements. As you know, some of the work you do for us is on a fixed fee basis and there has been a little bit of tinkering around other strategies.

However, these tend to be ad hoc, we do not get a consistent approach across sectors within your firm and the whole pricing arrangement seems to be unpredictable and time-consuming from our point of view to manage.

It would be great if your firm had a ‘smorgasbord’ of at least 6 or 8 core pricing options, that we could choose from on a case-by-case basis that are understood and applied consistently across the whole firm. I quite understand that within each of those options they will be the need for finessing and tweaking but surely this is feasible and in the firm's interests as well.

Your lawyers are excellent at coming up with bespoke technical solutions to our legal problems and objectives. I would like to see the same imagination and innovation around pricing solutions.

“Give us price certainty and predictability”

We want increasing price certainty, not just around the highly predictable repeat work but in relation to commercial transactions, negotiations and litigation.

Like our request for cost reductions, I know you will be cringing at this. I used to work in a firm like yours. I understand the challenges and the inherent tension in scoping and assumptions. But if we can be a little more transparent and collaborative on this issue, we can make some progress. I have seen this work with fellow GCs in other companies and their law firms. I know it can be done so please don’t tell me otherwise.

I understand that fixed fees carry greater risk for you and I am prepared to acknowledge that in the way the arrangement is structured but I do want you to be more imaginative and innovative about how greater tranches of your work for us can be done in a way that gives me greater budgetary certainty and control.

“Align your fees to the value we are getting”

I want to feel that whatever I am paying you, it represents good value from our perspective. I know that you think that when we talk about value pricing and AFAs, it is just shorthand for ‘we want a big discount’. Yes, we want to work with you to reduce our legal spend but as I have already said, it doesn’t have to be at the expense of your profitability.

There are many aspects of hourly billing that don’t work for us and one of them is that there isn’t necessarily any alignment between the billable hours you accumulate on a matter and the results you achieve for us. We expect you to come up with more imaginative ways to achieve a better alignment of cost and outcome.

"Skin in the game"

Finally, we would like you to have some skin in the game from time to time, when it comes to your fees. I know that you say that you are partnering with us and that you are with us through thick and thin. I would like to see some tangible manifestation of that.