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How Do You Price Legal Services With Data? - Case Study

Pricing legal services is an ongoing topic with us at Legal Decoder. It’s an issue many more firms are starting to address head on to ensure prices are commensurate with costs and clients won’t feel they are being overcharged.

We put together a case study over at High Performance Counsel (link) detailing pricing insights gathered from our data sets using the Pricing Engine. The Pricing Engine analyzes data and categorizes work elements through the billing narrative and applies UTBMS codes (when applicable). Then, the work elements are assigned to branches and sub-branches in Legal Decoder’s proprietary taxonomy. The result is a bottom-up analysis of work elements that can guide pricing strategies and review past performance.


The case study also shows how data analytics can help with your pricing strategies. As competition increases, pricing (and cost) management WILL be a differentiating factor in maintaining or increasing competitiveness.

Download the cast study here.

If your firm or company is interested in working with Legal Decoder then contact us here.


Who are you and what is your role?

I am the Founder and CEO of Legal Decoder.

After practicing law for nearly 20 years, I withdrew from the partnership at Pillsbury Winthrop Shaw Pittman LLP to take on a new challenge. Our mission at Legal Decoder is to help legal ops professionals and law firm leverage technology and data to drive better predictability, efficiency and value when it comes to legal services.   My role is to work with legal industry leaders to understand their challenges and goals and develop smart technology that helps to achieve their goals.

What do you think will be the single most defining feature of the next 1-5 years in law? And then, same question – but over the next decade?

The most defining feature will be the reaction of law firms whose lawyers are being asked by clients to change behaviors. Clients are looking to their law firms for more than legal services as they have been delivered over the past 70 years.   Clients expect law firms to utilize technology, leverage data, create new service delivery models and expand core competency to include things like project management and process mapping. Change is difficult but law firms must react with a sense of urgency to client demands and sell what clients want to buy.

In ten years, many of the baby boomers presumably will have retired so the industry is really going to be shaped by millennials. Millennials are a tech savvy generation so it’ll be interesting to see how they approach the rigors of the legal industry.

Artificial Intelligence (AI) is touted as a game-changer for law. What do you think?

AI will not replace lawyers but will augment how they practice.  Technology simply cannot do aspects of what lawyers do.  AI cannot reason by analogy like lawyers do.   Software cannot account for precedential value, from a business perspective, of taking one course of legal action as oppose to another.  Technology has its limitations.  Lawyers who embrace technology and data analytics to augment their practice and inform their advice will have a competitive advantage

Cybersecurity is often quoted as being both the next greatest risk and also the greatest revenue opportunity for legal services providers. What are your thoughts?

The risk of security and data breaches is undeniable. Notwithstanding, the levels and quality of protective measures, through encryption, password protection, network security monitor and so on continue to advance counteracting the threats. LegalTech solutions providers, legal ops experts and IT professionals are smart and take data security very seriously which means that security levels and preventative measures will become even more effective.

Is Automation a “silver bullet” for law – or is law more complicated than other sectors?

Automation is a silver bullet when it comes to standardization and processing speed. Technology can augment judgment and experience, but it’s not a viable substitute.   For example, our technology can help a lawyer develop a strategy around how many key witness depositions to take in a current case by evaluating how many key witness depositions have been taken in previous cases and correlating that data to outcome.   In some respects, historical data is a quasi-surrogate for a lawyer’s experience.  Someone needs to understand the data, however, and that’s where a lawyer fits in.   His or her judgment is not replaced by a machine.

There is much more data available for both lawyers and their clients? Is more better – or just more?

If data is recent and intelligently structured to align with how lawyers work, more data is better. The challenge faced by many legal operations professionals and law firms is that the data is inconsistently categorized, mis-tagged and poorly structured.  Our technology transforms raw data into refined information upon which legal industry leaders can make decisions.

We see a push for greater “value” and “innovation” in both legal products and price levels, structures? Is there more to value than the price tag these days?

To me, value has three components none of which considers the price tag.   The first component is outcome – clients want a favorable outcome or, at least, an acceptable outcome.   Second, clients want that outcome with a minimal amount of internal friction or burden.   Third, clients expect that outside counsel deliver the outcome with efficiency. If those components are present, law firms will get paid because they delivered value.

There’s a growing trend toward litigation funding and other forms of legal financing. What are your thoughts on that?

If litigation funding affords access to the justice system to people whose legitimate interests otherwise would not be represented, that advances the cause of justice. Given the financing and underwriting slant of litigation funding organizations, I suspect they’ll be early adopters when it comes to using data and metrics to assess litigation strategy and projected outcomes.

We see more pricing data and a push for greater transparency in legal procurement. What do you see as the implications of this?

This question goes to the heart of why Legal Decoder exists.   The biggest challenge in the legal industry is pricing uncertainty.  It’s a real problem and a real big problem.  Every year the legal industry is plagued by $60 BILLION of pricing uncertainty, waste and inefficiency.   $60 billion is up for grabs as between clients and their law firms.  Because of innovations in the legal industry and other competitive forces, clients don’t REALLY know what they should be paying outside counsel and law firms don’t REALLY know what they should be charging clients.   This is the problem Legal Decoder solves.   Our software analyzes legal spend data and granularly pinpoints precise tasks handled by legal professionals – like drafting a 10-K or reviewing a motion to quash or analyzing a Phase I environmental assessment – and identifies the level of legal professional who should handle the task and how long the task should take.   Some things can never be “priced” for lack of a better word, but 70% of what lawyers do falls into patterns that can be evaluated and statistically validated.  Our software helps legal industry leaders, both law firms and clients, more accurately and predictably price and economically evaluate legal services.   Both clients and law firms want better predictability, visibility, efficiency and value when it comes to legal services and Legal Decoder’s software provides the data and benchmarking capability to drive those results.

What’s the one shift or change you think will catch the industry un-prepared in the next decade – whether good, bad or downright ugly?

The best legal industry leaders, whether law firm leaders, CLOs or Legal Ops professionals, are already thinking ten years down the road.   These are ultra-smart people who are at the cutting edge of change and innovation in terms of technology, data analytics, alternative service delivery models and so forth.   While nobody has a crystal ball, change in the legal industry is usually not seismic but instead evolutionary so the best and brightest in the legal industry are unlikely to be caught unprepared.