Over the past couple of years Legal Decoder has worked on several high-profile bankruptcies and analyzed hundreds of millions of dollars in fees for the U.S. Trustee’s Office. Along the way we have had the opportunity to observe and provide solutions to the challenges that come with the fee examination process during bankruptcy administration.

Corporate legal departments want to talk about rates.  They want to talk about standard rates and alternative rates.  Then comes the hourly rate discount discussion because a discount means better value. Rates are part of the fee for service equation (Rate x Time = Fee) but the far less important component when it comes to driving value.  rate negotiations are arguably just a red herring - a seemingly plausible, though ultimately irrelevant, diversionary tactic. The conversations should focus on the work itself.  More specifically, who should be doing it, and how long should it take. Time efficiency is the red flag issue. 

There is a misperception in the legal industry that there is an imbalance of economic information as between law firms and their clients. The truth of the matter is that both law firms and their clients have access to comparable data. This billing data could be using more effectively if buyers and sellers of legal services collaborated around it using modern data analytics tools. This level of transparency will make the practice of law value driven and will benefit all parties.