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‘Alternate billing’ benefits client relationship, work quality and culture, explains director
One director discusses the alternate billing model her firm employs and its positive effects on relationships with clients, quality of work, and workplace culture.
Jess Feyder
Natasha Hannah, director and principal lawyer at in house nous, spoke to Lawyers Weekly about her firm’s alternate billing model.
“At its core, our fee philosophy is centred on providing value and building a long-term relationship,” she noted.
However, their alternate pricing model differs from regular fixed pricing, she argued, in that the firm co-designs proposals for their retainer service, so that clients have a say in what value looks like for them.
“With fixed price matters, we are agile in how we quote these (no two matters are the same),” explained Ms Hannah.
“For example, we have just started offering a ‘pre-paid’ advice service, as we understand not all clients want/need a retainer, but still need a ‘sounding board’ on a semi-regular basis.”
Ms Hannah added: “We find this helps clients to manage their internal cost centres better (especially in-house legal teams).”
Ms Hannah spoke about how alternate billing models like theirs alter the culture at a firm.
“For Paige (in house nous co-founder) and I, we found that in private practice in particular, billable hours felt counter-intuitive (because you were constrained by time), and, frankly, toxic to our mental health,” she said.
“Alternate pricing has been freeing for us.”
She continued: “Pricing based on value takes the mindset away from trying to work within a ‘budget’, to working to produce the best result for our client.”
“It has also reduced our administrative burden as rather than ‘recording time’ and ‘narrations’ against a matter or file, we are able to use project-based apps and platforms (which have really impressed our clients).”
“For us, our approach to pricing has effectively removed barriers to producing our legal advice,” explained Ms Hannah.
“Not using time-based billing has meant that our clients feel more comfortable to ‘pick up the phone’ at any time, as they know the ‘clock’ won’t start running.”
“Our clients are surprised when we say access to us via phone or Zoom on our outsourced in-house retainer is not based on time,” Ms Hannah illuminated.
“Our fixed monthly fee is based on expected usage and a pre-agreed scope; that’s it.
“We give the client access to our calendar, and they are free to book themselves in when they choose, just as if we were in-house.”
“By example, for me, this has worked really well with supporting a general counsel or small legal team who don’t have employment law expertise.
“I’m more than happy to be their ‘phone a friend’ and navigate BAU employment and HR issues.”
“The benefit of this is that the client feels comfortable to bounce ideas off us as things happen, rather than reactively (although that happens too),” explained Ms Hannah.
Ms Hannah also discussed why alternate billing models are especially relevant post-pandemic.
“Law firms need to be agile in their pricing and service offering,” she stated. “In the wake of AI and other tech, clients simply expect it.”
“We are continuously testing new ways to offer our services and love taking inspiration from industries outside of legal, as they are so much better at selling services than lawyers!”
“Removing ‘time’ constraints has allowed us to forge genuine connections with our clients, by facilitating stronger and more meaningful relationships.”
