At Reed Smith we realize that the selection of outside counsel involves a holistic evaluation of experience, quality, value and cost-effectiveness. As such, we are always striving to find innovative ways to provide value and contain legal costs for our clients, while focusing on what matters to us the most – fostering client relationships and producing a high-quality legal product.
Reed Smith’s client value team, which comprises dedicated and talented professionals with diverse legal project management (LPM) and strategic pricing backgrounds, grew out of the firm’s commitment to these principals. The team serves as a resource to our lawyers and clients throughout the duration of each matter, and offers a number of value-add services aimed at increasing cost-effectiveness and efficiency.
Members of the client value team possess a wide range of strengths and certifications that make the team stand out:
- Six Sigma Certifications
- PMP Certifications
- Legal Project Management Certifications
- JDs and MBAs
- More than 12 years of combined experience using legal project management and strategic pricing to provide value and cost-effectiveness to legal teams and clients
Legal Project Management
Though project management is not new, legal project management is. LPM developed out of client demand for cost-effectiveness and efficiency in this challenging legal environment. Successful LPM requires the application of a disciplined approach to budgeting and work-plan development, and a commitment to actively monitoring and managing each matter using real-time financial reporting.
Many other similarly situated law firms profess to be using LPM, but what sets us apart is that we are actually using it. We couple LPM with cutting-edge technology to enhance the cost-effectiveness, value and efficiency of the legal services we provide to clients.
Our LPM team is available to provide assistance at the outset of each matter by creating a detailed budget and process map or matter work plan that breaks the scope of work down to the task and timekeeper level.
Next our LPM team works with the legal team to implement matter-specific task codes and develop customized matter management reporting to measure budget and work plan performance at the task on a real-time basis.
The LPM team can also create a client extranet site through Reed Smith’s state-of-the-art technology, ouRSite©, which gives the client the ability to access real-time matter management reporting for a matter, and to monitor where the matter stands in relation to the budget and in terms of task completion. This enables our lawyers to have frequent communication with clients about how their matters are being managed, and equips our clients to make day-to-day decisions affecting their matters to ensure they are being handled in accordance with their business objectives and in the most cost-effective and efficient way possible.
Throughout the course of an engagement, our LPM team can also assist our lawyers with matter management by monitoring the hours it takes to perform certain tasks, the percentage of completion of work in relation to the scope of work and budget, timekeeper staffing levels and other valuable metrics. We meet and discuss those metrics with client relationship partners on a weekly basis so that any issues can be addressed proactively, and immediate action can be taken to resolve any issues.
Alternative Fee Arrangements
At Reed Smith we strongly believe that the key to successful pricing arrangements is understanding client needs. Each client has unique goals and business objectives, and while one alternative pricing arrangement may work well for one client, it may not work well for another. For this reason, at the beginning of each engagement, we sit down with our clients to have frank and detailed pricing discussions where we ask questions such as:
- What would the client consider a successful outcome of the matter?
- What are the client’s priorities, both overall and for the matter?
- What are the key risks and opportunities?
- Does the client have specific pricing parameters/concerns?
The answers to these questions help ensure that each client’s goals and business objectives are captured by the most appropriate alternative fee or value-based pricing arrangement.
Approximately 30 percent of our current matters involve alternative fee or value-based pricing arrangements. We have developed a range of pricing options to meet, and hopefully exceed, client demands for value and cost certainty.
In order to engage in risk sharing and ensure cost predictability for clients, we find using the following arrangements, independently or in various combinations, ensures the most effective alternative fee pricing strategy:
- Fixed Fees/Flat Fees
- Capped Fees (hourly rates not to exceed a set amount)
- Collar Fees (sharing of “savings” or “overages” should actual fees deviate from estimate)
- Contingent Fees
- Volume Discounts
- Blended Hourly Rates
- Success or Performance Bonuses
- Broken Deal Fees
Our pricing team is always available to discuss and model the different types of pricing scenarios that meet each client’s specific pricing needs.
If you have any inquiries about our client value team, or our implementation of legal project management and alternative fee arrangements, please contact Patrick Johansen, Director of Client Value.