Pricing

Transparency is a core value of LP, and that extends to pricing. The most common question we receive from clients – both current and prospective – is “How much is this going to cost?” And while the answer we usually give (“It depends”) is certainly true, there is a lot we can tell you about how and why we price our services, and why.

We do not have a one-size-fits-all approach to pricing. Arrangements vary by client and sometimes even by engagement. We have systems in place to help us scope projects and determine which pricing model makes the most sense, so we want to help you peek behind the curtain and gain an understanding of the types of pricing arrangements we offer, and the corresponding benefits.

Pricing Basics

There are various ways of determining the price of a legal engagement, but a few truisms we’ve learned over the years include:

  1. Client intake is intricately related to law firm pricing and economics. We accept that not all clients are right for us and that we are not right for all clients.
  2. Price will follow scope.
  3. We resist the urge to just jump in and start working. We must first spend time on the front end of an engagement to truly understand our client and the engagement at hand.
  4. One size does not fit all. Customization is necessary.
  5. Real value is realized at the intersection of pricing, process efficiency, and project management (the Three P’s).

Billing Rates

We prefer to price by project and matter, but realize in some cases hourly rates are most appropriate for a given engagement. In those scenarios, our rates are as follows:

  • $200 to $295 for paralegal and support staff
  • $320 to $430 for associates
  • $400 to $800 for senior counsel and partners

The following factors determine billing rates for each individual:

  • Market value and competition
  • Types of clients and client relationships
  • Level of expertise
  • Demand for time
  • Cost base

Our billing rates are NOT determined by:

  • Class year
  • Across-the-board percentage increases

Types of Fee Structures

Time-Based (hourly) Billing

  • Description: Fees are billed based on the number of hours worked on a given project.
  • Benefit to Clients: An expected, common form of billing.

Flat fees for repetitive and/or high volume work

  • Description: A “menu” of services with explanation and carve-outs is offered with corresponding price.
  • Benefit to Clients: Cost predictability

Hybrid

  • Description: Different rates and/or pricing structures based on pre-determined thresholds.  
  • Benefit to Clients: Allows client to invest in more opportunities by providing reasonable risk-sharing at key points in a transaction.

Mixed Rates

  • Description: Different rates for different types of work.  For example: standard rates for corporate work, but discounted rates for litigation.
  • Benefit to Clients: May be able to pay less in fees for costs that cannot be passed on to customers or to other units; accessibility to counsel at a lesser cost.

Volume-based discounts

  • Description: Per matter/component price decreases once certain volume thresholds are met. This fee structure typically requires periodic reconciliation.
  • Benefit to Clients: Efficiency from increased exposure to similar work and cost predictability.

Monthly Retainer

  • Description: A set monthly retainer for unlimited access to legal counsel within predetermined parameters and limits.
  • Benefit to Clients: Cost predictability

Success Fees

  • Description: Used in shared-risk situations. LP receives a premium for key milestones in exchange for assisting an agreed-upon level of risk to achieve the milestone.
  • Benefit to Clients: Client does not absorb all risk.

Scope

We define scope as legal work our clients:

  1. Really want and need.
  2. Will pay for.

In order to define the scope of a matter, we must understand our client’s desired outcome. We cannot assume we know what it is. Scope must also address the client’s responsibilities, which include responsiveness, internal work, and other client-initiated factors that will help to control costs.

Based on those understandings, we can then develop a statement of work to include:

  • Objective(s)
  • Assumptions/carve-outs
  • Deliverables and quantities
  • Key activities
  • Timing and fee budget/estimate per activity/phase

We try our best to stay within the scope of a given project, but also know that is not always possible. Scope creep commonly occurs during a legal engagement – it is a rule rather than an exception – but we take the following actions to minimize its possibility and impact:

  • Set criteria for when to request a change approval and a clear procedure for doing so.
  • Introduce the possibility in the engagement letter.
  • Identify and address creep issues early on.
  • Analyze what each change means to schedule and to budget:
    • Ask trade-off questions.
    • “What else could we adjust?”

How We Manage Client Expectations

  1. Know who needs to be updated.
  2. Schedule regular check-ins, via in-person meetings, phone calls, and e-mail.
  3. Ask for input/feedback along the way.

Representative Pricing

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Pricing is about value. Learn what some of our clients have to say about LP's value.