Value-based billing firms a welcome part of outsourcing mix

Law firms pioneering value-based pricing models in Australasia are seeing clients willing to experiment with them despite their smaller size.

Law firms with value-based pricing models in Australasia are seeing clients increasingly willing to use them despite their smaller size and capacity.
Switch Legal director Melanie Noble told NZ Lawyer that since launching in Australia two and a half years ago, the IP and technology boutique had seen evidence clients were willing to add such firms to their consideration set.
“It depends on the type of work; obviously on the enormous M&A deals and litigation matters clients will still have a strong tendency to go to big firms, for a full-service offering and potentially a larger team to handle the volume of work.
“But clients are getting a bit savvier in terms of who they put on their panels; in many cases they are choosing to have a mix of big law firms and some of the more specialist firms who do offer value billing and can offer the same levels of service at much reduced costs, who can handle it more efficiently,” Noble said.
Switch Legal’s team emerged out of Australian banking giant NAB’s in-house legal team, and as a result is able to offer clients genuine in-house experience.
“We have all spent a lot of years in the big firms but also a lot of time in-house as well; clients see the value of that, as we do get the way they have to operate. We can behave more like in-house clients are expecting in-house lawyers to behave.”
Because of the firm’s cost structure, Noble said the firm is able to offer a broader range of pricing models for clients, particularly on high value work.
“Clients are under quite constrained budgets and that is part of the reason why firms are broadening their panel; we do see it going that way,” she said.
“Our focus on a value-based approach has helped us. In this economic climate a lot of organisations out there are looking for both efficiency in terms of time and effort and in terms of cost, so the word is certainly getting around.”
Noble said there has also been a growing focus in the media on firms like Switch Legal and the benefits of the value-based pricing model.
“Clients are actively seeking that out to a greater extent now, and that’s helping to ensure we are gaining some real traction,” she said.

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