Victorian Legal Services Board + Commissioner releases new guide on innovative pricing models

New research undertaken by the Victorian Legal Services Board + Commissioner (LSB), through both their complaints and auditing process, has found that a major consumer complaint has been the billing model adopted by lawyers. With many lawyers opting for an hourly rater rather than a value based price. The LSB has found that this creates uncertainty as well as lowering productivity and discouraging the use of products to improve efficiency, for example, technology. As well as this the model creates a pressure on lawyers to hit billing targets, negatively impacting lawyer wellbeing.

Client research has also suggested that this is likely to cause access to justice issues, with many clients avoiding hiring a lawyer due to fears that the costs may spiral and leave them worse off, creating a perception of poor value for money in the legal services market.

The LSB has therefore released research and analysis into two pricing models, the agreed price model (whereby the service is commissioned at a fixed price) and the subscription model (whereby clients pay a recurring stable fee, in exchange for work whenever they need it). The research looks at the benefit of these models in comparison to the hourly rate, as well as looking at how firms may implement these new models.

Read more here. 

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