Here are our four (evolving) hypotheses. Let us know what you think.
1. Lawyers and clients want predictable fee arrangements. This seems like an obvious point, but it isn’t. We’ve spoken to many clients who think lawyers purposefully use opaque and unpredictable fee structures to overbill. The truth is that lawyers don’t believe they can accurately set fixed fees for complex engagements or predict when fees will spike. The result is fee cutting, delayed payment and lost client trust. We designed Feehive to help lawyers and clients accurately predict how much an engagement will cost and when fees will peak.
2. Lawyers and clients want to collaborate on budgets and fee forecasts to eliminate mistrust around billable hours. Wait, what? No they don’t. We think they do. One of the most interesting things we’ve learned during the Feehive journey is that many lawyers are willing to share more information on fees and billing if a collaborative process would improve client relationships (and lead to more prompt and less stressful payment). Feehive is designed to let lawyers easily share budgets and fee forecasts with clients. Our mission is to help lawyers and clients align on how, why and when fees will be incurred.
3. Lawyers without IT departments and consultants want more access to pricing technology and expertise. Most (all?) legal pricing technology and expertise are available only to the largest law firms with enterprise systems, “data hygiene” practices and financial experts. The financial and technical support requirements for those solutions makes them unavailable to the vast majority of lawyers and clients. We think lawyers outside Big Law want more access to legal technology generally and to pricing technology specifically. We’re committed to delivering a transformative technology solution to practices of any size right out of the box. Viva #alllaw.
4. Predictive pricing is the first step away from the billable hour business model. Almost everyone in the legal ecosystem would like more pricing options beyond the billable hour business model. But the billable hour survives because it’s an efficient response to a basic data failure. Lawyers charge clients by the hour because they do not have the tools required to use historic pricing data to price the complexity of future legal engagements. Now that we’re building the tools that allow lawyers to accurately price that complexity, the billable hour will no longer be the only game in town.
Spoiler alert: We won’t banish the billable hour tomorrow. Since we live in the real world, we’ll start by making hourly fees easier to predict, explain and understand. As lawyers and clients use our system we’ll build more sophisticated models and price setting will become more accurate. Once lawyers and clients trust their ability to predict hourly fees, things will get really interesting. Lawyers and clients will then be able to look at the value delivered during past engagements rather than the hours spent. Once that happens they can begin to have different conversations about the price for legal services.