The concept of value-based pricing (VBP) is already common in
the consulting world and has received a big boost in the health
care industry thanks to various initiatives launched in conjunction
with the Affordable Care Act. Will this transfer over to the legal
industry? Law firms could soon see a similar demand for change in
how they charge from clients trying to get the most bang for their
buck.
Benefits of Value-Based Pricing
VBP is a successor to alternative fee arrangements (AFAs), but
instead of billing based on the services provided, it charges
clients based on what they value. Some firms consider this the
supply and demand theory of basic economics. Others consider it a
more customized approach to fees that rejects a one-size-fits-all
model. VBP recognizes that different clients place different values
on different factors. For example, one client might be primarily
concerned with winning at trial to deter other potential lawsuits,
while another may focus
